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Johnson v. American Homestead Mortg. Corp.12/24/1997
The opinion of the court was delivered by
PRESSLER, P.J.A.D.
This is a real estate appraiser malpractice case in which the jury found defendant Donald A. Farinella sixty percent responsible and defendant Brien Danko forty percent responsible for the economic loss sustained by plaintiff Marie A. Johnson for which it returned a total verdict in her favor of $17,000. Plaintiff appeals, asserting that the trial Judge erred in allowing defendants a pro tanto credit of $15,000, the amount of the pretrial settlement plaintiff made with defendant American Homestead Mortgage Corporation (AHMC). She also claims that the jury's damages verdict was against the weight of the evidence and that she was entitled to a remittitur. While we agree that the Judge erred in allowing the credit, we are satisfied that the jury's damages verdict is supported by the evidence and must be affirmed. We therefore remand to the trial court for modification of the final judgment by adding thereto the additional sum of $15,000, to be paid by the defendants in accordance with their respective liability allocations.
This controversy arises out of a so-called reverse mortgage loan entered into between plaintiff and defendant AHMC in September 1986. Plaintiff, recently widowed and burdened by substantial debt, owned her home in Livingston free of all liens. In order to obtain funds, both to pay off the debt and to provide her with an income, she entered into a mortgage arrangement with AHMC whereby she granted it a first mortgage on her property in exchange for a monthly payment to her of $700. The sums so advanced were to be repaid to AHMC on sale of the premises together with interest at the rate of eleven percent and all of the appreciation in the value of the property between the date of the execution of the mortgage and the date of the sale. In order to determine the value of the property as of the date of the mortgage, the base-line value, AHMC retained the services of defendant Park Real Estate , a real estate appraisal company owned by defendant Farinella, who also served as the supervising appraiser. The actual appraisal of plaintiff's home was done by Park's employee, defendant Danko. Danko's appraisal, evaluating the then value of the property at $172,000, was reviewed and approved by Farinella.
Plaintiff decided to sell the property in April 1990, listing it for sale at $245,000. Pursuant to her agreement with AHMC, she advised it of her intention to sell, and AHMC initiated the appraisal procedure therein provided for, namely, the selection by each party of an appraiser from a predetermined list. Plaintiff selected Park. AHMC selected an appraiser having no prior connection with the property. Park's appraisal, performed by Farinella, valued the property at $220,000, while AHMC's appraiser valued it at $215,000. AHMC then averaged the two appraisals and advised plaintiff that for purposes of her appreciation-payment obligation, the present value was $217,500. Plaintiff sold the property about two months later for $205,000. AHMC demanded, as the appreciation-payment, the sum of $45,500, that is, the difference between the base-line appraisal of $172,000 and the sale-date appraisal of $217,500. Plaintiff paid it that sum at closing out of the closing proceeds. This action for the recovery of that money against AHMC, its individually named employees, Park, Farinella, and Danko ensued, all of them alleged to be joint and several tortfeasors on theories of fraud, negligence and professional malpractice.
Suffice it to say that at the time trial commenced, the only remaining defendants were Farinella and Danko, and the only claim remaining against them was based on professional malpr
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