Simonson v. Z Cranbury Associates

The issue on this appeal is whether, in a foreclosure action brought by a mortgagee on a non-recourse purchase-money mortgage, the defaulting mortgagor is entitled to enforce a release provision covering a portion of the mortgaged property.

The subject property is a 249 acre farm in Cranbury, New Jersey. After the developer-mortgagor, Cranbury Associates, L.P. (Cranbury), had paid $180,000 in option payments to secure the right to purchase the property, owned by mortgagee Edward Simonson (Simonson),1 Cranbury exercised its right to purchase the property. Cranbury paid ten percent of the…