Plaintiff Shree Atulya Realty, LLC filed a lawsuit against defendant Jorlinar Santos concerning the purchase of property from defendant located in Newark. As part of the purchase, the plaintiff financed directly with the defendant (the seller) a portion of the purchase price with a note and mortgage on the property. The payments to the seller for this financing were conditioned on certain repairs being completed. An issue arose as to the required repairs not being completed and, because they were not completed, the plaintiff took the position that no monies were owed and the mortgage should be discharged. Thereafter, plaintiff filed a lawsuit in the Chancery Division, General Equity Part, seeking to discharge the mortgage and asserted claims for a breach of contract, unjust enrichment and fraud. When the case reached the trial stage, one of the issues in Shree Atulya Realty, LLC v. Santos, 2024 N.J. Super. Unpub. LEXIS 223 (App. Div. Feb. 14, 2024) was whether defendant failed to timely request a jury trial and, as a result, whether this failure constituted a waiver of the right to a trial by jury.
The complaint had been filed in the Chancery Division on June 25, 2018. On August 16, 2018, defendant filed an Answer, Counterclaim, and Third-Party Complaint against other defendants. Plaintiff had not made a jury demand in the complaint, nor did Defendant request a jury trial at the time his Answer was filed. On October 24, 2018, the Third-Party Defendants filed an Answer to the Third-Party Complaint, which also did not include a jury demand.
The Court conducted two case management conferences in 2018. On both occasions, case management orders were issued, providing that if the pleadings did contain a jury demand, any parties seeking a jury trial must file a motion for a jury trial within 10 days of the date of the order or the jury demand would be waived. No jury demand was made as a result of either case management order.
In February 2019, the parties all filed for a summary judgment. At that time, defendant also made a request to transfer the case to the Law Division and requested a jury trial. On March 15, 2019, the Chancery Division denied the parties’ motion for summary judgment without prejudice and also denied defendant’s request for a jury trial. The judge found the request untimely and waived pursuant to Court Rule 4:35-1(c). At that time, the court also transferred the case to the Law Division.
Before the case was tried, in May 2020, the defendant filed a motion seeking to vacate the prior order denying his request for a jury trial. The Law Division found that there was no basis to reconsider the Chancery judge’s determination that defendant had waived the right to a jury trial by failing to make a timely demand.
Thereafter, the case did proceed to a 4-day bench trial with defendant as the only defense witness. He testified that the Agreement signed at the closing was inconsistent with the terms negotiated by the parties and that he did not agree to make repairs. Nevertheless, he also testified that he completed all the required repairs.
The court found that defendant’s claim that the Agreement was inconsistent with the intent of the parties to lack credibility and did determine that the Agreement was the “‘operative agreement”’ now. The court also determined that defendant had been required to make the necessary repairs and, with the contingency requiring repairs not met, the judge determined that the mortgage should be discharged and cancelled. Further, any obligation for plaintiff to pay the note was nullified.
Therefore, the trial court entered judgment in favor of plaintiff on its claim for a declaratory judgment and discharged and cancelled the mortgage and nullified the note. The judge ruled that plaintiff had no obligation to pay defendant pursuant to the Agreement, Note, or Mortgage. All other claims were dismissed and an appeal to the Appellate Division followed.
Among other issues on appeal, defendant argued that the trial court made a mistake in finding he had waived his right to demand a jury trial and by denying reconsideration of that order. Defendant argued that he was not able to demand a jury trial earlier because jury demands are not permitted in the Chancery Division. Defendant contended that his right to demand a jury arose when the case was transferred to the Law Division.
The Appellate Division, however, rejected the defendant’s argument that he had not waived his right to demand a jury trial. The Court cited to the court rule, which stated that any party may demand a trial by jury “by serving upon the other parties a demand therefore in writing not later than ten [days] after the service of the last pleading directed to such issue.” Further, the Appellate Division noted that per this rule, the failure of a party to serve a jury demand as required would constitute a waiver of trial by jury.
The appeals court found that the defendant did not demand a jury trial until he filed a motion for summary judgment on February 15, 2019. At that point, it was long after the time to make such a demand had expired. Further, the Appellate Division noted that a jury trial could be demanded on any legal claim in the Chancery Division. It noted that the Case Management Orders expressly stated a jury could be demanded in the Chancery Division. Hence, the Appellate Division found that the lower court had correctly determined that defendant had waived his right to demand a jury trial.
Further, the Appellate Division found that the trial court did not abuse its discretion by finding that defendant failed to establish good cause to relax the court rule, nor did it make a mistake by denying the defendant’s motion for reconsideration of this order. Thus, the Court upheld the trial court’s decision to deny the defendant the right to a jury trial.
