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Palisades Properties Inc. v. Brady

Decided: May 27, 1963.

PALISADES PROPERTIES, INC., A DELAWARE CORPORATION AUTHORIZED TO DO BUSINESS IN THE STATE OF NEW JERSEY, PLAINTIFF,
v.
GEORGE H. BRADY AND KATHERINE P. BRADY, HIS WIFE, JOSEPH J. BRUNETTI CONSTRUCTION CO., A CORPORATION OF THE STATE OF NEW JERSEY, BOROUGH OF FORT LEE, NEW JERSEY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, JERSEY PALISADES LAND COMPANY, A NEW JERSEY CORPORATION, PETRO KATKO AND MARY JAHOCK AND PALISADES INTERSTATE PARK COMMISSION, A BODY CORPORATE AND POLITIC ESTABLISHED BY COMPACT BETWEEN THE STATES OF NEW YORK AND NEW JERSEY, DEFENDANTS. SEALANTIC FUND, INC., A MEMBERSHIP CORPORATION OF THE STATE OF NEW YORK, PLAINTIFF, V. PALISADES PROPERTIES, INC., A DELAWARE CORPORATION, AND THE BOROUGH OF FORT LEE, NEW JERSEY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS



Pashman, J.s.c.

Pashman

[79 NJSuper Page 334] This consolidated action involves a dispute over the use of a tract of land which is located just south of the George Washington Bridge in the Borough of Fort Lee. Because of the complexities of the legal issues presented it is necessary, in limine , to relate in some detail the factual background which spawned the present controversy. The limited stipulation of facts agreed upon by the parties serves as a convenient beginning point in this regard.

In April 1927 the Borough Council of Fort Lee approved, by resolution, a map entitled "Map of Hudson Bridge Park Estates," which included a tract of land (herein the Estates) situated south of the George Washington Bridge and on the top of the geographic area known as the Palisades.

Directly to the south of this tract are lands now owned by the Palisades Interstate Park Commission (herein the Commission), which had been, in large part, the site of a Revolutionary War fortification. The Commission's acquisition of this property was in furtherance of a plan to restore the fortification as part of a recreational park and to help preserve the scenic integrity of the entire Palisades.

In acquiring much of its property the Commission received considerable aid in the form of substantial philanthropic contributions from John D. Rockefeller, Jr., who, by the mid-1930's had donated over 652 acres of land to the Commission at a cost in excess of 19 million dollars.

In 1952 a proposal was made to erect a multi-story apartment house development in Fort Lee within the Estates tract. The Commission, upon learning of this proposal, and in order to block the erection of the apartment houses, offered to purchase the lots owned by the borough in the Estates. Negotiations ensued and the Commission enlisted the aid of Sealantic Fund, Inc. (herein Sealantic), a charitable corporation of the State of New York founded by John D. Rockefeller, Jr.

A plan was then devised whereby the Estates area was divided into two parcels, "A" (the western half of the Estates) and "B" (the eastern half of the Estates), Parcel "B" going to the Commission and Parcel "A" to be disposed of by Sealantic for commercial development subject, however, to certain height and sign restrictions.

In December 1953 Sealantic offered to purchase all of the lots owned by the borough (137 out of 195) for $250,000. The offer was subsequently accepted. Thereafter, a dispute arose as to the necessity, advisability and validity of the

transaction, and prolonged litigation ensued in the federal courts. While the exact nature of that controversy is not particularly relevant to the matter presently before the court, suffice it to say that the conflict arose, in part, out of the borough's concern over loss of ratables and a desired modification of certain height restrictions.

In June 1956 a compromise solution was agreed upon and effectuated by the litigants in the federal court action. The transactions which resulted from the agreement and which form the core of the instant litigation are as follows:

(1) The borough executed and delivered a deed to Sealantic conveying a total of 137 lots for the sum of $300,000;

(2) The borough executed and delivered a deed to Sealantic conveying 12 additional lots;

(3) Sealantic agreed to convey to the borough all of the property owned by or to be conveyed to it in Parcel "A," together with 10 additional lots which it had previously acquired;

(4) Sealantic agreed to convey to the Commission, without consideration, 74 lots in Parcel "B."

As a result of the consummation of the transactions above described, Sealantic divested itself of all property ownership in the Estates. However, the deed from Sealantic to the borough contained the following restrictions:

"The within described property is conveyed with the following restrictions which shall run with the land:

The Grantee as part of the consideration for this conveyance hereby covenants and agrees for itself, its successors and assigns with the Grantor, its successors and assigns, for the benefit of the property conveyed to the Grantor by deed bearing even date herewith and adjoining the premises hereby conveyed on the east:

1. That no building, improvement or structure of any kind or character whatsoever shall ever be constructed or maintained on the premises hereby conveyed or on the premises described in paragraph 3 below or on any part of either thereof which shall extend in height above a horizontal plane at an elevation of 320 feet above mean sea level at the George Washington Bridge:

2. That no structure consisting of a sign, display or similar device, whether illuminated or not illuminated, shall ever be constructed or

maintained on, above or east of the easterly wall of any building, improvement or other structure which may at any time be erected on the premises hereby conveyed or on the premises described in paragraph 3 below or on any part of either thereof and that during any period of time, no building improvement or structure (other than a sign, display or similar device) is erected or maintained on said premises or on any part thereof, no such sign, display or similar device shall ever be constructed or maintained on the premises hereby conveyed or on the premises described in paragraph 3 below or on any part of either thereof east of a line drawn parallel to and distance 100 feet easterly from Hudson Terrace, as now laid out.

3. The premises in addition to the premises hereby conveyed on which the restrictions set forth in the foregoing paragraph 1 and 2 are imposed by the Grantee are identified as:

Lots 3, 16, 18, 20, 38 and 40, Block 2; Lot 8, Block 4; Lots 8 and 21, Block 1; and Lots 1, 8, 10, 13, 14 and 16, Block 3, all as shown on a certain map entitled: 'Map of Hudson Bridge Park Estates, Fort Lee Borough, Bergen Co., N.J.' filed in the Bergen County Clerk's Office on May 11, 1927, as Map No. 2262."

Simultaneous with the execution and delivery of the deeds, the borough executed a separate instrument, captioned Declaration of Restrictions and Covenants," by which it, in effect, iterated the restrictions and covenants contained in the deed from Sealantic.

The afore-mentioned height and sign restrictions were imposed by the conveyance and the "Declaration" upon 15 lots within the Estates, title to which was in the borough from the outset and at no time in Sealantic. Thus, following the 1956 transactions, the borough owned 100 lots in the Estates upon which height and sign restrictions were imposed. Sealantic, in return, was content in the knowledge that its avowed purpose of preserving the scenic beauty of the Palisades was protected through the restrictions imposed upon the lots in Parcel "A."

The next matter of any consequence occurred on March 18, 1959, when, following a duly advertised offer, 96 of the 100 lots owned by the borough were sold to an agent of Palisades Properties, Inc. (herein Properties) for $128,500. The other four lots owned by the borough were sold to the Port of New York Authority and are not involved in this action.

At the time of the 1956 agreement between Sealantic and Fort Lee, and at the time of the March 1959 sale, these 96 lots were in an "R-4" zoning district which limited buildings to 35 feet or 2 1/2 stories in height. In April 1959 the borough's zoning ordinance was amended, pursuant to an express condition in the offer of sale, changing the zoning district to "C-3" and thereby increasing the height limitation to 96 feet or 8 stories.

After Properties purchased the 96 lots from the borough it then proceeded to obtain the only privately held lots in the Estates (13 in number) -- none of which was expressly subject to the 1956 height and sign restrictions. In May 1961 Properties also sought and obtained from the borough a vacation of two paper streets in the Estates area, viz. Cliff Avenue and Old Fort Boulevard. Properties' avowed purpose in purchasing the lots in question and in seeking a vacation of the paper streets which abutted thereon was to allow it ample space upon which to construct a motor hotel.

It is undisputed that as early as 1957, inquiries had been made by Properties' parent affiliate, Marriot Motor Hotels, Inc., of both the Commission and Sealantic regarding a possible waiver of the height and sign restrictions. This approach was taken because Properties contemplated the erection of a tower, as part of its overall motel complex, which would exceed the applicable height restriction. Since the Sealantic-Fort Lee agreement was consummated in the context of height restrictions and an intention to maintain the scenic beauty of the Palisades area, the attempts by Properties to obtain some sort of waiver were to no avail. However, the testimony and exhibits did indicate certain discussions which tended to reflect a willingness on Sealantic's part to raise the restrictions to 354 feet.

In July 1962, after negotiations had failed, Properties filed an application for a building permit. The filed plans for its proposed motel complex revealed that it would be located up on the lots expressly restricted by Sealantic originally, upon the lots acquired by Properties from private persons, and

upon the vacated streets. None of the structures depicted on the plans filed by Properties exceeded the 320-foot height restriction imposed by the Sealantic-Fort Lee agreement of 1956.

Prior thereto, in January 1962, Properties instituted an action to quiet title to its property, asking the court to determine the extent and scope of the 1956 restrictions. This suit was prompted by the prior course of negotiations between Properties, the Commission and Sealantic, and their failure to arrive at a satisfactory solution. The major points of conflict revolved about the scope of the restrictions insofar as the privately purchased lots were concerned, the legality of the vacation of Cliff Avenue and Old Fort Boulevard, and the validity of the 1959 amendment to the Fort Lee zoning ordinance. The major contestants were Properties and the Commission. Fort Lee assumed a neutral position, and several other named defendants were merely concerned with the effect of the street vacations upon their rights of ingress and egress.

Four months later Sealantic filed a separate action setting forth much of the background previously discussed and charging Properties and the borough with a scheme to circumvent the 1956 Sealantic-Fort Lee agreements. More specifically, Sealantic alleged that Properties' plan to erect a multistory tower upon that portion of their property which was acquired from private owners and the street vacations would, if effectuated, substantially impair the scenic beauty and natural skyline of the Palisades and thereby deprive Sealantic of its rights bargained for under the 1956 agreement with Fort Lee. Sealantic demanded, inter alia: (a) a permanent injunction against violation of the height and sign restrictions on land expressly covered by the 1956 agreement; (b) a permanent injunction against the use of specifically restricted lands in connection with a use of other lands violating the restrictions; (c) a declaration that the restrictions applied to all properties formerly within the control of Fort Lee, including the vacated paper streets; (e) a decree setting aside the actions

of Fort Lee in amending its zoning ordinances and vacating its streets to permit the erection of edifices which would violate the restrictions; (f) a permanent injunction restraining and enjoining Fort Lee from doing any other affirmative act so as to permit such violations; and (g) reformation of the 1956 agreements and deed so as to "set forth the true intent of the parties" thereto, and enjoining any violation of the agreements and deed as reformed.

Properties' answer, while denying the allegations of inequitable conduct, stated that "it admits that this defendant hopes to erect a structure on its unrestricted property which will be of a height in excess of the restrictions" set forth in the 1956 agreements between Sealantic and Fort Lee (emphasis added).

After the cases were consolidated and the issues joined, Properties, as noted earlier, filed its plans and sought a building permit. Thereafter, on August 8, 1962 this court signed a temporary restraining order enjoining the borough and its building inspector from approving or issuing a builder's permit or other official approval for excavation, construction or other building activity upon the property in question.

On August 24, 1962 Properties was enjoined pendente lite from further applying for or taking any action seeking approval of a building permit or other official approval concerning building activity upon the property described in their July application, and Fort Lee and its building inspector were enjoined from issuing any such approval. A motion to vacate the restraints was subsequently denied and the matter proceeded to trial.

Before embarking upon a consideration of the legal issues in this case one additional observation is necessary. While the present plans submitted by Properties do not contemplate the erection of any structure in excess of the 320-foot height and sign restrictions, all counsel have agreed, as reflected by the pretrial order in this matter, that the court should dispose of the propriety not only of the present building plans, but future plans as well, with a view to avoiding a succession of

actions arising from the filing of new plans. To this end, the court will assume that Properties intends to erect a structure upon its privately acquired lots which, if located upon the lots conveyed by Sealantic to Fort Lee, would ...


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