                                NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.




                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-0178-18T4

JSA SURGICAL FACILITIES,
LLC,

          Plaintiff-Respondent,

v.

CENTER FOR SPECIAL
PROCEDURES, LLC and
DOUGLAS MANGANELLI, M.D.,

     Defendants-Appellants.
______________________________

SHORE SURGICAL PAVILLION,
LLC,

          Plaintiff-Appellant,

v.

JSA SURGICAL FACILITIES,
LLC and RAVI PONNAPPAN, M.D.,

     Defendants-Respondents.
______________________________

                    Argued telephonically October 8, 2019 – Decided November 12, 2019
            Before Judges Koblitz, Whipple and Mawla.

            On appeal from the Superior Court of New Jersey,
            Chancery Division, Ocean County, Docket Nos. C-
            000009-17 and C-000120-17.

            Terrence John Bolan argued the cause for appellants
            (Bolan Jahnsen, attorneys; Michelle Lynn Greenberg
            and Nicole Mary DeWitt, on the briefs).

            Vincent T. Cieslik argued the cause for respondents
            (Capehart & Scatchard PA, attorneys; Vincent T.
            Cieslik and Mary Ellen Rose, on the brief).

PER CURIAM

      Defendants Center for Special Procedures, LLC (CSP), and Shore

Surgical Pavilion, LLC (SSP), appeal from the trial court's July 31, 2018 order

dismissing plaintiff JSA Surgical Facilities, LLC's (JSA) complaint and

defendants' counterclaims with prejudice. The dismissal came after the trial

court found two sets of asset purchases agreements (APAs) between the parties

unenforceable because there was no meeting of the minds, and because material

provisions were too indefinite for the court to enforce. Because the reasons

expressed by Judge Francis R. Hodgson, Jr., in his well-reasoned opinion are

supported by the trial record, we affirm.

      We have discerned the following facts from the record.          Douglas

Manganelli, M.D., Michael Lepis, M.D., and Allen Morgan, M.D., were the


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                                        2
owners of CSP, a one-room surgical practice registered with the New Jersey

Department of Health (DOH). Manganelli and Lepis are also the sole members

of SSP, a two-room freestanding ambulatory surgical center licensed by the

DOH.

       Ravi Ponnappan, M.D., is a surgeon and managing member of JSA.

Ponnappan wanted to develop a network of ambulatory surgical centers in New

Jersey. However, since New Jersey has a statutory prohibition on the creation

of new ambulatory surgical practices, he sought to acquire existing surgical

centers.

       Ponnappan learned CSP and SSP were for sale and met with Alex

Stagliano, the manager of CSP and SSP. Several weeks after he toured the

facilities with Stagliano, Ponnappan met with Manganelli and Lepis, and offered

to purchase both facilities.    A few weeks later the parties met again and

Ponnappan orally agreed to purchase CSP for $250,000 and SSP for $1,850,000,

for an aggregate purchase price of $2.1 million.

       Defendant's counsel, with input from plaintiff's counsel, drafted the first

APAs. On June 12, 2016, Ponnappan signed an APA to purchase the assets of

CSP for $250,000 and placed $25,000 in escrow to bind the agreement.

Ponnappan also signed an APA to purchase the assets of SSP for $1,850,000 ,


                                                                          A-0178-18T4
                                        3
placing $185,000 in escrow to bind the agreement. The line for the closing date

in the APAs was blank, so Ponnappan wrote in "as agreed to by the parties[.]"

Both of the first APAs, with the added language, were then signed by Manganelli

on behalf of defendants. Neither document contained a time of the essence

clause, nor any financing contingencies. A condition precedent to the sale was

plaintiff's contractual obligation to obtain approval from the DOH for the

transfer of the registration and the license.

        Defendants, through counsel, later proposed additional housekeeping

items and drafted new versions of the agreements, the second APAs, changing

the escrow agent, inserting a closing date of September 17, 2016, adding a bill

of sale, and requiring a new signed contract. Ponnappan signed the second

APAs without noticing the newly-inserted closing date. Later, Ponnappan sent

an email asking that his signature be withdrawn because of the closing date. At

some point thereafter, Manganelli signed the second APAs.

        The parties continued to communicate, but never agreed to a new closing

date.    During this time, plaintiff was still pursuing bank financing for the

purchase, despite the lack of a financing contingency. On December 5, 2016,

Manganelli sent letters to plaintiff terminating the APAs for both facilities.




                                                                          A-0178-18T4
                                         4
      On or about January 6, 2017, plaintiff filed a complaint against CSP and

Manganelli alleging breach of contract, breach of the covenant of good faith and

fair dealing, and tortious interference with prospective economic advantage.

Plaintiff also filed an order to show cause seeking to restrain the sale of CSP to

third parties, which was denied.

      CSP filed an answer and counterclaim in March 2017. Plaintiff then filed

an answer to the counterclaim. In the meantime, SSP filed a complaint against

JSA alleging breach of contract, breach of the covenant of good faith and fair

dealing, misrepresentation, and inducement, and sought declaratory judgment,

termination of the APA, release of the deposit monies to SSP, damages, and

counsel fees.   JSA filed an answer to the complaint, and the trial court

consolidated the two pending matters.

      Following discovery, Judge Hodgson conducted a seven-day bench trial,

after which he dismissed JSA's complaint and CSP's and SSP's counterclaims

through an order issued on July 31, 2018, which was supported by a thorough

and well-reasoned written decision. He found the handwritten term setting the

time for performance upon the future agreement of the parties was too indefinite

for the court to enforce. The judge further found the parties labored under a

"deep misunderstanding" as to the form and terms of payment, which was an


                                                                          A-0178-18T4
                                        5
essential element of the agreement, which indicated the parties did not intend to

be bound; there was no meeting of the minds. Ultimately, the court found the

first APAs were facially unenforceable.

      As to the second APAs, the court found the parties intended them to

completely replace the original set of agreements. The court determined the

second APAs constituted an attempted novation, which was ineffective because

the agreement terminated when plaintiff withdrew its signature before it was

signed by defendants, and therefore the documents were never fully executed.

Although plaintiff asserted it was ready, willing, and able to close on December

14, 2016, the court found otherwise, since defendants never agreed to the

December closing date and plaintiff had not obtained authority to proceed from

the DOH as required by the condition precedent.

      Finding the contracts were unenforceable, the judge determined there

could be no breach of the covenant of good faith and fair dealing. Accordingly,

the judge denied all requests for attorneys' fees by the parties. This appeal by

defendants followed.

      Defendants' essential argument is that the parties' conduct demonstrated a

meeting of the minds as to material terms and the court erroneously excused

performance by plaintiff, and that the second APAs were an amendment rather


                                                                         A-0178-18T4
                                       6
than a new agreement. Defendants also argue they were entitled to retain the

escrow funds. We disagree.

      We generally defer to factual findings made by a trial judge when such

findings are "supported by adequate, substantial, and credible evidence." Gnall

v. Gnall, 222 N.J. 414, 428 (2015) (citing Cesare v. Cesare, 154 N.J. 394, 411-

12 (1998)). Accordingly, we only reverse a trial judge's factual findings when

they are "so manifestly unsupported by or inconsistent with the competent,

relevant and reasonably credible evidence as to offend the interests of justice."

Rova Farms Resort, Inc. v. Inv'rs Ins. Co., 65 N.J. 474, 484 (1974) (quoting

Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)). In

contrast, a "trial judge's legal conclusions, and the application of those

conclusions to the facts, are subject to our plenary review." Reese v. Weis, 430

N.J. Super. 552, 568 (App. Div. 2013) (citing Manalapan Realty, L.P. v. Twp.

Comm. of Manalapan, 140 N.J. 366, 378 (1995)). With that deferential standard

in mind, we turn first to defendants' challenge to the judge's determination there was

no enforceable agreement.

      Contract law requires "an 'offer and acceptance' by the parties, and the

terms of the agreement must 'be sufficiently definite [so] that the performance

to be rendered by each party can be ascertained with reasonable certainty.'"


                                                                              A-0178-18T4
                                          7
GMAC Mortg., LLC v. Willoughby, 230 N.J. 172, 185 (2017) (quoting Weichert

Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992)) (alteration in original). For a

contract to be formed, the parties must "agree on essential terms and manifest

an intention to be bound by those terms." Weichert, 128 N.J. at 435. However,

"[w]here the parties do not agree to one or more essential terms . . . courts

generally hold that the agreement is unenforceable." Ibid. "The polestar of

contract construction is to discover the intention of the parties as revealed by

the language used by them." Karl's Sales & Serv. v. Gimbel Bros., 249 N.J.

Super. 487, 492 (App. Div. 1991).

      "Generally, the terms of an agreement are to be given their plain and

ordinary meaning." M.J. Paquet, Inc. v. N.J. DOT, 171 N.J. 378, 396 (2002)

(citation omitted). "[W]here the terms of a contract are clear and unambiguous

there is no room for interpretation or construction and the courts must enforce

those terms as written." Karl's Sales, 249 N.J. Super. at 493 (citing Kampf v.

Franklin Life Ins. Co., 33 N.J. 36, 43 (1960)); see also Cty. of Morris v. Fauver,

153 N.J. 80, 103 (1998).

      Courts may not "remake a better contract for the parties than they

themselves have seen fit to enter into, or to alter it for the benefit of one party

and to the detriment of the other." Karl's Sales, 249 N.J. Super. at 493 (citing


                                                                           A-0178-18T4
                                        8
James v. Fed. Ins. Co., 5 N.J. 21, 24 (1950)). "A court has no power to rewrite

the contract of the parties by substituting a new or different provision from what

is clearly expressed in the instrument." E. Brunswick Sewerage Auth. v. E. Mill

Assocs., Inc., 365 N.J. Super. 120, 125 (App. Div. 2004).

      Defendants argue the parties were operating toward the same goal, to sell

and purchase CSP and SSP, and the conduct of the parties demonstrated a

meeting of the minds as to all material aspects of the APAs. They further assert

neither party argued at trial the APAs were unenforceable. They argue the court

incorrectly analyzed the issue of the closing date and improperly found the

language constituted an agreement to contract at a later date, rendering the first

set of APAs unenforceable. Defendants assert the closing date was a non-

essential issue and the court was permitted by applicable law to impose a

reasonable closing date where such terms were ambiguous in the contract.

      Based on our review of the record it is clear the primary disputes between

the parties related to dates of performance. The judge found, "as a result of the

parties 'jumping the gun' and executing contracts that were incomplete, essential

terms were handwritten in by [JSA] without sufficient explanation." The judge

rightly concluded that while ordinarily where no time for performance is fixed,

a reasonable time is prescribed by the court, here the parties agreed to set a


                                                                          A-0178-18T4
                                        9
specific date at a later time. Rather than failing to fix a specific date, the parties

agreed to determine the date in the future. The court concluded "the handwritten

term setting performance upon the future agreement of the parties is too

indefinite for [the] [c]ourt to administer and enforce." Moreover, the court

found based on

             the indefinite language used in the agreement and the
             testimony of the parties at trial, . . . the parties
             themselves . . . left an essential term unresolved. . . .
             [T]he parties did not come to a meeting of the minds
             and did not express an intent to be presently bound
             when executing the agreement.

      Additionally, the judge determined the parties "labored under a deep

misunderstanding as to an essential element, the form and terms of payment,

which further reflects . . . the parties did not intend to be bound." Specifically,

the court made detailed findings:

             Here, the terms of payment is an essential element of
             the contract which goes to the heart of this deal.
             Although defendants had rejected a mortgage
             contingency provision, the essence of Dr. Ponnappan's
             handwritten closing term, effectively extended closing
             until he obtained financing, which was in effect, to
             reinsert a mortgage contingency provision.          Dr.
             Ponnappan testified that he did not set a specific date
             for closing because he wanted to insure he could obtain
             financing. Conversely, Dr. Manganelli testified that he
             wanted a quick closing and that he abandoned
             negotiations with other potential buyers on the
             representation by Dr. Ponnappan that he could "write a

                                                                              A-0178-18T4
                                        10
check" to close. However, in light of the importance of
this term to defendants, there was insufficient
explanation as to why Dr. Manganelli signed the
APA[]s which did not include a closing date, if a quick
closing was his primary concern. It is the [c]ourt's view
that Dr. Manganelli was continuing to rely on the
misunderstanding he carried away from the initial
meeting in May, that the financial closing would take
place quickly without financing and that the lack of
direct communication, relying on [Stagliano],
exacerbated the initial understanding. While Dr.
Ponnappan believed he was not required to close until
he obtained third party financing.

       Moreover, Dr. Ponnappan's intention to obtain
financing was not hidden from defendants. Dr.
Ponnappan testified credibly that although he
represented he had the capital to close, he always
intended to finance the transaction. Dr. Ponnappan's
efforts in obtaining financing were repeatedly
communicated to the defendants through defendant's
agent [Stagliano]: on May 6, 2016, [JSA] emailed
[Stagliano] requesting an equipment inventory,
indicating that "the bank is asking for a line item
breakdown of the purchase.          Do you have one
avail[able] or can you create a list?" . . .; on May 6,
2016, [Stagliano] replied to Dr. Ponnappan,
acknowledging the effort to finance stating that "you'd
need one for each center, unless you have one loan
covering both centers . . . . Let me know what you find
out from the bank." . . . ; on May 9, 2016, Dr.
Ponnappan wrote to [Stagliano] where the conversation
over financing continued in discussing the inventory
and that the "[a]ttorney is actively finalizing purchase
agreement . . . . Financing steps underway . . . .
Financing will take its course.["]. . . Discussions as to
financing continued through December of 2016. On
December 1, . . . Dr. Ponnappan wrote [Stagliano]

                                                            A-0178-18T4
                          11
            requesting tax returns for CSP and SSP; twelve hours
            later, [Stagliano] responded that he was sending the
            request to the accountant and included two "Request for
            Transcript of IRS Return" forms signed by Dr.
            Manganelli. . . . These actions were known by
            defendants through their agent [Stagliano]. In addition,
            defendants demonstrated they were aware of [JSA]'s
            efforts with the action of Dr. Manganelli in executing
            the APA[]s without a closing date, and sending the
            executed IRS forms to the accountant, demonstrate at
            the very least, a passivity as to a quick closing date,
            which they maintained at trial was the most important
            term.     The [c]ourt is satisfied that these facts
            demonstrate a profound misunderstanding[] between
            the parties which sprang from the informality of the
            process and which was compounded by the parties'
            apparent lack of direct communication. It is clear to
            [the] [c]ourt that the parties never came to a meeting of
            the minds as to the form and timing of payment, which
            was an essential element of this agreement. In addition
            to demonstrating a lack of meeting of the minds and
            intent to be bound, the indefiniteness of the handwritten
            term would be impossible to enforce.

      It was not clear whether Ponnappan would successfully obtain financing

and DOH approval, and Manganelli never knew when, if ever, Ponnappan would

have been able to close on the transaction. Ultimately, the court concluded the

original APAs "do not constitute a meeting of the minds, and further, are

unenforceable on their face. Furthermore, the indefiniteness of the handwritten

terms was not saved by the second set of APA[]s."




                                                                        A-0178-18T4
                                      12
      We reject defendants' argument the court was required to establish a

reasonable time to close due to the ambiguous term in the agreement. The

parties never agreed to a specific closing date and included explicit language

that they agreed to enter into another voluntary agreement to establish an

appropriate closing date in the future.     We discern no error in the judge's

determination the handwritten terms as to the closing date were indefinite, rather

than ambiguous, and nor do we find the judge erred when he declined to impose

a date which would, in effect, rewrite the contract for the parties and eliminate

a voluntary agreement to contract as to a to-be-determined closing date.

      We also reject defendants' argument that because the parties agreed to sell

and purchase the subject properties, established a purchase price, and the buyer

performed due diligence on the purchase, all essential elements of the contract

were assented to and a meeting of the minds was achieved. As Judge Hodgson

chronicled in detail, the parties labored under deep misunderstandings as to how

and when the purchase would be financed and never established a closing date.

These terms were essential to the agreement. It was the miscommunications

between the parties regarding financing and the potential closing dates that

eventually caused the negotiations to fall apart.




                                                                           A-0178-18T4
                                       13
      We further reject defendants' assertion the court erred in not enforcing the

specific language agreed to by the parties, and that its opinion had the practical

effect of writing a better contract for the buyer. Based on our review, we cannot

conclude the court rewrote the agreement—in fact, it explicitly chose not to.

      We also reject defendants' argument the parties did not "clearly and

definitely" intend a novation. "The elements of a novation are: (1) a previously

valid contract; (2) an agreement to make a new contract; (3) a valid new contract;

and (4) an intent to extinguish the old contract." Wells Reit II-80 Park Plaza,

LLC v. Dir., Div. of Taxation, 414 N.J. Super. 453, 466 (App. Div. 2010) (citing

T & N, plc v. Pa. Ins. Guar. Ass'n, 44 F.3d 174, 186 (3d Cir. 1994); In re

Timberline Prop. Dev., Inc., 115 B.R. 787, 790 (Bankr. D.N.J. 1990)).

      The court found, in pertinent part:

            The provisions of the APA[]s along with the
            communications and behavior of the parties support the
            conclusion that the second set of APA[]s were intended
            to completely replace the original agreements; that is
            the parties intended a novation. If the parties were only
            seeking to modify the first APA, all that would have
            been required under the agreement was a signed
            provision by the party against whom it was to be
            enforced.

The parties' communications demonstrated their intent to enter into "superseding

agreements" to remedy "housekeeping" issues in the original APAs. The parties


                                                                          A-0178-18T4
                                       14
did not execute a signed amendment including the additional terms, but executed

a new escrow agreement, bill of sale, and new APAs. The new APAs included

an integration clause that the agreements were intended to supersede all prior

agreements between the parties pertaining to the transaction. Thus, the court's

determination that the second APAs constituted an attempted novation is amply

supported by the record. Moreover, the novation failed because the APAs were

never fully executed.

      We further reject defendants' argument that the court erroneously denied

damages where plaintiff failed to diligently pursue DOH approval, in breach of

a material term contained in the APAs. Because the parties failed to execute an

enforceable contract, there was no breach to warrant an assessment of damages

to either party. We also reject the argument that defendants are entitled to funds

deposited into the escrow account pursuant to the escrow agreement, and to

restitution damages due to the buyer's breach, which defendants argue resulted

in loss of economic opportunities.

      The escrow agreement provided "the [e]scrow [a]gent shall release the

[funds] and deliver [them] to [s]eller upon the occurrence of the following

events: (a) upon the [c]losing of the APA; or (b) upon the termination of the

APA if the [c]losing does not occur as a result of [p]urchaser's breach of the


                                                                          A-0178-18T4
                                       15
APA." This provision cannot be triggered, as no breach occurred, and the court

correctly found each party's claims for damages were moot. We have carefully

reviewed the record regarding all remaining arguments and have determined

they are without sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(E).

      Affirmed.




                                                                        A-0178-18T4
                                      16
