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Mitsubishi Motors Credit of America, Inc. v. Mendez

A-1013-00T3 (N.J. Super. App. Div. 2001) (Unpublished)

CONTRACTS; TIME OF THE ESSENCE—A “time of the essence” provision in a settlement agreement may preclude a court from granting extensions of time within which one party would otherwise be obligated to perform.

A car buyer defaulted under its retail installment contract. The lender sought a replevin order. Before a hearing could be held, it entered into a stipulation of settlement. That stipulation called for payment of a sum certain before the close of business on a given date, in exchange for clear title and dismissal of the action. “The stipulation provided that, failing compliance, the [car] was to be surrendered and that [the lender] was free to pursue any deficiency.” The money was not delivered on the given date. The next day, a hearing was held and the car buyer explained that she had arranged for the sale of the car to a dealer, but that she had been running late “only to difficulties associated with ... her pregnancy; and that [the lender] had refused to extend the time for payment” for two more days. In open court, the lower court confirmed that the dealer did indeed have the check, but required “one more signature.” The judge orally declared that the check would have to be in the hands of the lender’s attorney by the next morning. The lender’s attorney made clear that the arrangement was “under protest.” The next morning, the lower court judge called the lender’s attorney to advise that he had extended the deadline until the end of that day because the dealer was having difficulty obtaining a second signature. The check was delivered before the end of the day. The lender persisted in arguing that because the terms of the stipulation had not been complied with, it was entitled to replevin. Given that the car had been sold, it sought damages in place of replevin. On appeal, the lender argued that the lower court abused its discretion by granting what amounted to a two-day extension. The Appellate Division was unsympathetic. It stated that, “it is not the appellate function to decide whether the trial court took the wisest course, or even the better course… The question is only whether the trial judge pursues a manifestly unjust course.” “Given the circumstances,” it did not believe that the lower court’s handling of the matter resulted in a manifest denial of justice. Further, the Appellate Division took note that there was no express “time of the essence” provision in the settlement agreement.


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