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NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2258-07T32258-07T3
NICHOLAS BOZINE and
VERONICA BOZINE,
Plaintiffs-Appellants,
V.
CRAIG D'ORAZIO,
CENTURY 21 HEARST REALTY,
JASON LEPORE, CALABRESE HOMES,
INC., STEPHEN CALABRESE and
GERALD DEMARCO,
Defendants-Respondents.
Argued January 29, 2009 - Decided
Before Judges Parrillo, Lihotz and Messano.
On appeal from Superior Court of New Jersey, Law Division, Gloucester County, Docket
No. L-107-05.
John W. Trimble, Jr., argued the cause for appellants (Trimble & Associates, attorneys;
Mr. Trimble, on the brief).
Lawrence Berg argued the cause for respondents Century 21 Hearst Realty and Jason
Lepore (Marshall, Dennehey, Warner, Coleman & Goggin, attorneys; Mr. Berg, on the
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brief).
Respondent Craig D'Orazio has not filed a brief.
Respondent Stephen Calabrese has not filed a brief.
PER CURIAM
Plaintiffs Nicholas and Veronica Bozine appeal from summary judgment entered in favor of defendants
Century 21 Hearst Realty (Century 21) and Jason Lepore, and from the order denying plaintiffs' request for
reconsideration. Plaintiffs argue sufficient evidence was presented demonstrating the existence of material factual
disputes, making the grant of summary judgment inappropriate. Following our review of the record, we are
persuaded by plaintiffs' arguments and reverse.
We recite the facts derived from evidence submitted by the parties in support of and in opposition to the
motion for summary judgment, viewed in a light most favorable to plaintiffs. Brill v. Guardian Life Ins. Co. of Am.,
142 N.J. 520, 523 (1995).
On October 31, 2001, Craig D'Orazio contracted with defendant Calabrese Homes, Inc., owned by defendant
Stephen Calabrese (collectively Calabrese), to build a single-family residence at 1 Lansbrook Court in Washington
Township (the home). Unfortunately, D'Orazio lost his job. He contacted Century 21 to sell the uncompleted home.
Lepore was D'Orazio's Century 21 agent.
Plaintiffs saw a multiple listing service (MLS) description for the home stating it was a "Brand-New, One of a
Kind Custom Built Home!" in "average+ condition" and "ready for delivery." The listing also stated the home was not
part of a homeowner's association. Plaintiffs contacted Century 21 agent Lonnie Chiavo regarding the home.
Century 21 disclosed the house was initially constructed at D'Orazio's request and it was acting as the listing broker.
Guided by Chiavo, plaintiffs viewed the home.
During the walk-through, plaintiffs saw water in the basement. Plaintiffs questioned Lepore, who suggested
the water likely resulted from the basement windows being left open or from workers hosing down the basement
floor. Lepore agreed he would check with the contractor. Lepore later confirmed that what he surmised as the
water's source was correct. In a second walk through, evidence of basement water remained present. Plaintiffs again
questioned Lepore and spoke to Calabrese, who stated the water resulted from work on the septic system and any
water problem would be corrected.
A proposed Contract for Sale of Real Estate (the contract) was circulated. The contract, as originally proposed,
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was specifically amended at plaintiffs' request to include a comprehensive addendum. One paragraph of that
addendum stated:
The dwelling shall be constructed in accordance with the Architect's Sealed Blue Prints
A-1 through A-8, inclusive, prepared by John W. Bishop ARA, copies of which are
attached hereto as Exhibit "A". The dwelling shall be further constructed and contain
those features as set forth in the Multiple Listing Service provided by Century 21 Hearst
Realty, Inc., a copy of which is attached hereto as Exhibit "B".
Following Calabrese's review of the addendum, he telephoned Lepore. Calabrese issued an undated memo to
Lepore confirming:
Item 2: The contract will include a reduced set of the blueprints unsealed. The prints are
owned by the architect and are not the possession of the seller or the builder. Also the
home was not constructed exactly as the blueprints show. This is due to on-site
decisions made by the builder, change orders, options, truss manufacture[']s
interpretation of the prints. None of the variations of the prints ha[ve] changed the
home to the extent that the home is not structurally sound.
Lepore did not relate the contents of Calabrese's memo to plaintiffs. On February 18 and 19, 2003, plaintiffs and
D'Orazio executed the contract, which included the addendum, as witnessed by Lepore.
Plaintiffs commissioned a home inspection report from Aardvark Home Inspections, issued on March 12, 2003. The
Aardvark inspector, Sam Flamma, conducted a visual investigation of easily accessible areas of the home. Flamma's
report identified the following areas as unsatisfactory: grading away from house; concrete walks and driveways;
condition of the roof, including flat valleys and exposed nails; carbon monoxide detectors; and extreme signs of
wetness in the basement. The report also listed five areas labeled as "Major Deficiencies." These included: "roof";
"structural issues"; "safety items such as, but not limited to handrails and/or guards, steps that are dangerous, CO
detector, etc."; "concrete spalling"; and "grading is probably the water problem."
Plaintiffs submitted to Century 21 a copy of the inspection report and a written request for repair of the items.
Lepore assured plaintiffs the items "would be taken care of." Lepore and Calabrese made repeated representations
that the basement water problem would be corrected and other items identified by the home inspector would be
repaired by the date of closing.
After a second inspection, Flamma prepared another report dated March 29, 2003. Construction was not yet
complete and again, Flamma identified major construction deficiency areas. The first three had not changed from
his prior report. He also identified a need to fire seal all holes etc., correct the grading, and now added "plumbing
and electrical issues." Flamma's report also noted standing water was in the basement. He recommended plaintiffs
hire a structural engineer to provide a more thorough analysis of the areas of deficiency he identified.
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Lepore told plaintiffs, "Calabrese fixes everything." Assured by these representations, plaintiffs consented to
schedule closing.
Immediately prior to the April 7, 2003 closing, plaintiffs again walked through the home. Although no water
was visible, obvious water stains were in the basement. Calabrese did not attend closing but was contacted by
telephone. Lepore represented Calabrese remediated most major items and gave plaintiffs Calabrese's signed
"punch list." Lepore stated the items Calabrese completed were initialed, and the remainder would be completed
within thirty days. The parties agreed to escrow $5,000 pending Calabrese's completion of the outstanding items on
the repair punch list.
Within thirty days of closing, water seeped into the basement. Plaintiffs commissioned a structural
engineering evaluation of their home from Preferred Property Inspections & Engineering, Inc. The evaluation
identified various structural deficiencies and concluded the home had not been constructed in accordance with the
architect's plans, as required by the contract addendum. Noted defects included: (1) faulty waterproofing of the
exterior foundation, a sinkhole created where the garage meets the basement due to improper backfill, and flawed
exterior grading caused water seepage into the home; (2) construction of the home's foundation failed to comply
with the architectural drawings and the standards promulgated by the Council of American Building Officials,
necessitating the foundation's reinforcement; (3) floor joists over the basement were installed contrary to "good
industry practice"; and (4) the layout and design of the pre-engineered roof trusses did not comply with the
manufacture's specifications. Plaintiffs' repair estimate totaled $519,190.
Plaintiffs filed a sixteen count complaint against Lepore, Century 21, D'Orazio, Calabrese, and Calabrese's
subcontractor, defendant Gerald DeMarco. Following discovery, Lepore and Century 21 filed for summary
judgment. Also, D'Orazio filed a separate motion for summary judgment. The Law Division judge denied D'Orazio's
motion and granted summary judgment in favor of Lepore and Century 21. Thereafter, the judge denied
reconsideration motions filed by D'Orazio and plaintiffs. Plaintiffs and D'Orazio settled. Default judgment was
entered against Calabrese with damages fixed at $983,823.14. Plaintiffs filed this appeal seeking to reinstate their
claims for fraud, violations of the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -184, and negligent
misrepresentation against Lepore and Century 21.
Plaintiffs argue the motion judge erred when she determined neither Lepore nor Century 21 made an
"affirmative misrepresentation of any material fact that induced [plaintiffs] to make this purchase." Further, the
court concluded because plaintiffs undertook an independent investigation of the home's condition, they were
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aware of the property's condition and did not rely on any representation, negligent or otherwise, made by
defendants.
In support of their position, plaintiffs first suggest the initial MLS listing was misleading because the home
was not completed, the unfinished basement was not usable due to the water seepage problem, and the home was
subject to assessment as part of a homeowner's association. Second, plaintiffs identify Lepore's failure to disclose
Calabrese's deviation from the identified architect design plans as a fraudulent omission and cite his repeated
representations regarding completion of identified deficiencies, including correction of the cause of the water
seepage problem, namely, workman hosing down the floor or open basement windows, were false.
Our review requires we use the same standard as the trial court in deciding a summary judgment motion.
Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.) (citing Antheunisse v. Tiffany & Co., 229
N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989)), certif. denied, 154 N.J. 608 (1998). Dismissal
of a complaint on summary judgment must be granted "if the pleadings, depositions, answers to interrogatories
and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact
challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c); Brill, supra,
142 N.J. at 528-29. "Genuine" means "only if, considering the burden of persuasion at trial, the evidence submitted
by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party,
would require submission of the issue to the trier of fact." R. 4:46-2(c).
In determining whether there is a genuine issue of material fact for summary judgment purposes, the trial
court must ascertain "what reasonable conclusions a rational jury can draw from the evidence[.]" Brill, supra, 142
N.J. at 535. To make that determination, the judge "'must accept as true all the evidence which supports the
position of the party defending against the motion and must accord him [or her] the benefit of all legitimate
inferences which can be deduced therefrom[.]'" Ibid. (quoting Pressler, Current N.J. Court Rules, comment 1 on R.
4:40-2 (2009)). If reasonable minds could differ, the motion must be denied. Ibid. In light of these standards, we
conclude summary judgment was improvidently granted.
We review the basic elements of plaintiffs' stated causes of action. To successfully prove common-law fraud
plaintiffs must show: (1) a material misrepresentation of fact; (2) knowledge of its falsity; (3) an intention that the
unknowing party rely on the false misrepresentation; (4) the reliance was reasonable; and (5) resultant damages.
Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997) (citing Jewish Ctr. of Sussex County v. Whale, 86 N.J. 619,
624-25 (1981)).
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A claim under the CFA is shown when a consumer identifies any material misrepresentation or
unconscionable commercial practice and a causal nexus between the unlawful conduct and the consumer's
ascertainable loss. International Union of Operating Eng'rs Local No. 68 Welfare Fund v. Merck & Co., 192 N.J. 372,
389 (2007). Reliance is not required.
Real estate brokers and agents are subject to the provisions of the CFA. Vagias v. Woodmont Props., L.L.C.,
384 N.J. Super. 129, 136 (App. Div. 2006). A real estate broker's affirmative misrepresentations that mislead a home
purchaser to execute a contract of sale may trigger CFA liability. Gennari, supra, 148 N.J. at 609. Also, CFA liability
may result for non-disclosure of a defective condition if the condition was known to the broker, not readily
observable to the buyer, and the defective condition was material to the transaction. Strawn v. Canuso, 140 N.J. 43,
59 (1995); Mango v. Pierce-Coombs, 370 N.J. Super. 239, 254 (App. Div. 2004).
Finally, a cause of action for negligent misrepresentation, which is "'[a]n incorrect statement, negligently
made and justifiably relied on, . . . may be the basis for recovery of damages for economic loss . . . sustained as a
consequence of that reliance.'" McClellan v. Feit, 376 N.J. Super. 305, 317 (App. Div. 2005) (quoting H. Rosenblum,
Inc. v. Adler, 93 N.J. 324, 334 (1983)). Century 21 and Lepore, as agents for D'Orazio, owed plaintiffs a duty to
exercise reasonable care in communicating facts material to the condition of the home, which affected plaintiffs'
decision to purchase the realty. Weintraub v. Krobatsch, 64 N.J. 445, 455-56 (1974). If made without a determination
of their accuracy, Lepore's varied explanations for the cause of the wet basement and his affirmations regarding
correction of noted problems, may serve as a basis for breach of that duty. Ibid.
Examining the facts at bar, we agree with the motion judge that for the most part, the MLS listing describing the
property was incapable, as a matter of law, of establishing fraud or inducing plaintiffs to purchase the property. The
plaintiffs' walk-through readily displayed the unfinished nature of the home. The statements that the home was a
"One of a Kind Custom Built Home[,]" which was in "average+ condition" and "ready for delivery" merely represent
unactionable opinion rather than actionable factual misrepresentations. Rodio v. Smith, 123 N.J. 345, 351 (1991);
Daibo v. Kirsch, 316 N.J. Super. 580, 589-91 (App. Div. 1998). Also, based on this record, we cannot discern the
materiality, in forming plaintiffs' decision to purchase the home, of the incorrect representation regarding the
existence of the homeowner's association.
Therefore, summary judgment would have been appropriate had plaintiffs' complaint been grounded solely
on the MLS listing. However, we view differently the claims bottomed on (1) the deviation from the architect's
design plan; (2) the nonconformity with the manufacturer's installation of the roof trusses; (3) and the
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representations regarding correction of the water seepage and other major deficiencies. The proofs surrounding
these issues implicate the real estate agent's duty to disclose material facts shaping a buyer's decision to purchase a
home.
The contract contained specific representations that the home would be constructed in accordance with the
architectural plans drawn by John Bishop. The inclusion of this express clause in the addendum by plaintiffs shows it
was a motivating factor in plaintiffs' decision to purchase this home. Additionally, Calabrese, although uncertain,
believed he discussed the plan deviations with Lepore and then specifically mentioned the changes, including
changes in the recommended truss installation, in the memorandum he sent to Lepore. Further, Calabrese admitted
some of these changes modified the structure of the home.
Contrary to the motion judge's finding, a deviation from the stated plans would not have been revealed in
plaintiffs' home inspections. Thus, a finding of Lepore's silence on this issue evinces a fraudulent representation and
a failure of an implicit condition of the sale. Moreover, a finding of Lepore's willful failure to disclose that the home's
construction was not as represented, prior to the execution of the contract, establishes an essential element of the
alleged causes of action for fraud and consumer fraud. See Tobin v. Paparone Constr. Co., 137 N.J. Super. 518, 526
(Law Div. 1975) (a purchaser may establish a common-law claim by showing the seller's or broker's nondisclosure of
material facts induced the purchaser to buy); see also 138 N.J. 2, 18 (1994) (if consumer fraud consists of an
omission, a plaintiff must show a defendant acted with knowledge). Consequently, the extent and nature of
Lepore's knowledge of the deviations was critical to determine plaintiffs' causes of action. Resolving such a factual
dispute, along with the determination of whether the design deviations resulted in the structural flaws that caused
plaintiffs' ascertainable loss, remain for the fact finder.
Additionally, it is for a jury to determine whether Lepore made specific representations to plaintiffs regarding
Calabrese's claimed correction of the defective conditions, including water seepage into the basement, along with
whether those representations were false and had the "capacity to mislead" plaintiffs. Cox, supra, 138 N.J. at 17. The
depositions of Lepore, Calabrese and plaintiffs reveal factual differences in what Calabrese claims he told Lepore
and what Lepore reported to plaintiffs. Lepore denies he made any representations regarding the completion of the
repairs during closing in direct conflict to plaintiffs' assertions, necessitating presentation with a jury.
We conclude the evidence submitted by the parties on the motion, after giving plaintiffs all legitimate inferences
therefrom, sustain triable issues of fact favoring submission to a jury. R. 4:46-2(c). Accordingly, we reverse and
remand the matter to the Law Division for trial on plaintiffs' causes of action.
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Reversed and remanded.
At all times, Century 21 disclosed it role as dual agent.
Plaintiffs' brief suggests Calabrese filed for protection pursuant to Chapter 7 of the Bankruptcy Code. No
information is provided regarding the disposition of the claims against DeMarco.
Plaintiffs voluntarily dismissed the other counts against these defendants, alleging intentional and negligent
infliction of emotional distress.
"[T]he principal factors shaping the duty to disclose have been the difference in bargaining power between
the professional seller of residential real estate and the purchaser of such housing, and the difference in access to
information between the seller and the buyer." Strawn, supra, 140 N.J. at 59 (internal citations omitted).
(continued)
(continued)
15
A-2258-07T3
April 24, 2009
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