06-2-8800 Lakeland W. Capital VIII LLC v. Reitnour Inv. Props. L.P., App. Div. (per curiam) (11 pp.) This case arose from efforts by plaintiff Lakeland West Capital VIII LLC to enforce as assignee a promissory note and an associated personal guaranty after defendants allegedly defaulted on a $3.3 million commercial loan. The promissory note was executed by a limited partnership, defendant Reitnour Investment Properties L.P., and the personal guaranty was executed by defendant Philip A. Reitnour. The partnership’s general partner is defendant Reitnour Property Corp., a corporation headed by Reitnour. At the end of discovery, 15 months after the complaint was filed, Lakeland moved for summary judgment. Defendants did not directly oppose the summary judgment motion. Rather, they unsuccessfully cross-moved to compel arbitration pursuant to a permissive arbitration clause contained in the guaranty. The judge found that defendants had waived their right to trigger the arbitration clause. Ruling on the motion for summary judgment, the judge found that the partnership had defaulted on the note; struck defendants’ affirmative defenses; and declared defendants all jointly and severally liable for the partnership’s nonpayment of the note. During the course of the litigation and the discovery period leading up to the summary judgment motion, defendants gave no indication to Lakeland and the court that they intended to have the dispute submitted to arbitration. Defendants actively engaged in various discovery disputes, motions and other pretrial matters. It was not until defendants filed their cross-motion responding to Lakeland’s summary judgment motion that defendants’ desire for arbitration surfaced. Given these circumstances, the motion judge correctly concluded that defendants by their conduct had waived Reitnour’s right to trigger the guaranty’s arbitration clause.
11-2-8774 First Gen.l Construction Corp. v. Westampton Courts Condo. Ass’n, App. Div. (per curiam) (16 pp.) WCCA hired FGCC to serve as the general contractor for a construction project on its property. Fante’s Plumbing Heating and Air Conditioning Inc. performed work as FGCC’s subcontractor. After WCCA failed to pay FGCC, FGCC was arguably unable to pay Fante’s, which filed a complaint against FGCC. FGCC filed a third-party complaint against WCCA, asserting breach of contract. The parties reached a settlement under which WCCA was obligated to make an initial payment to FGCC of $158,000; make 300 monthly payments of $3,148.40; and pay $42,000 to a separate subcontractor. FGCC agreed to dismiss its third-party complaint; obtain final inspections and approvals for the project; “correct shortcomings” in its construction contract with WCCA; and settle an unrelated matter (the Castle litigation). WCCA made the initial payment and paid the $42,000, but only made six of the monthly installment payments. The parties also disputed responsibility for repairing several overheating heat pumps, and FGCC was unable to fully resolve the Castle litigation. Within the six-year limitations period, FGCC filed a motion to enforce the settlement. It contended that it had substantially complied with the terms of the agreement and argued that WCCA had breached the agreement. The judge concluded that FGCC had breached the agreement by not resolving the Castle litigation and that the principles of laches and equitable estoppel barred FGCC from seeking enforcement of the settlement. The panel found that the judge erred by failing to consider whether any determined breach was material, which would have relieved WCCA of its obligations. Accordingly, it reversed, remanded and directed the judge to review the motion anew and determine whether there was a material prior breach of the agreement by FGCC or whether other relief to reimburse WCCA would be satisfactory. The panel also concluded that the judge erred in applying equitable estoppel, since WCCA was not denied the opportunity to assert its fraud claims, and laches, since FGCC’s motion to enforce the settlement was governed by a statute of limitations. The court also rejected WCCA’s contention that FGCC was barred from entering into the settlement because its corporate structure had been dissolved. The panel found that the charter was revoked, not dissolved, for failure to file annual reports and submit the accompanying annual fee and that as a dissolved corporation, FGCC had the right to sue and be sued.
