Sitogum Holdings, Inc. v. Ropes

Phyllis Ropes (defendant) was an elderly woman who owned waterfront property in Brielle, New Jersey. On January 3, 2000, while Phyllis and her husband were at their winter home in the Cayman Islands, her husband died suddenly. On January 13, Phyllis executed two powers of attorney: one in favor of Marlene Van Noord and one in favor of Linda Dowhan. The powers of attorney gave Van Noord and Dowhan the power to sell the Brielle property on Phyllis’s behalf. On January 26, Phyllis executed another power of attorney in favor of Van Noord. That power of attorney was prepared by Sitogum Holdings, Inc. (Sitogum) (plaintiff). On January 27, Van Noord executed an option contract in Sitogum’s favor that gave Sitogum the right to purchase the Brielle property within eight months for $800,000. Sitogum was assisted by counsel in the transaction, but neither Phyllis nor Van Noord received solid legal advice about how to sell the Brielle property for the best price. In February, the Brielle property was appraised for between $1.5 and $1.75 million, and Phyllis began working with Dowhan to market the property. On April 13, Phyllis executed a contract to sell the Brielle property to another party for $1.5 million. When Sitogum learned of that contract, Sitogum exercised its option to purchase the property. Phyllis indicated that she would not transfer the property to Sitogum, and Sitogum sued Phyllis to compel specific performance of the option contract. Phyllis moved for summary judgment, asserting that the option contract was unconscionable and should be declared void. Because there were no factual disputes concerning the contract and its formation, the court found it appropriate to consider unconscionability at the summary-judgment stage.