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City of Jersey City v. Roosevelt Stadium Marina Inc.

Decided: May 21, 1986.

CITY OF JERSEY CITY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
ROOSEVELT STADIUM MARINA, INC., A CORPORATION OF THE STATE OF NEW JERSEY; ROOSEVELT MARINA, INC., A CORPORATION OF THE STATE OF NEW JERSEY; CAPTAIN'S TABLE, INC., A CORPORATION OF THE STATE OF NEW JERSEY; JACK JAFFE, IRVING FORMAN, ARTHUR WALTMAN, JR. AND CHARLES SAN FILIPPO, DEFENDANTS-RESPONDENTS, JANET AND VINCENT MOORE, PLAINTIFFS-INTERVENORS, V. KOLOMBARIS & PULOS, INC., DEFENDANT-INTERVENOR. K. HOVNANIAN COMPANIES OF NEW JERSEY, INC., APPELLANT-INTERVENOR



On appeal from Superior Court, Law Division, Hudson County.

Furman, Petrella and Skillman.

Per Curiam

The City of Jersey City (Jersey City) appeals from a December 24, 1984 order denying its motion for relief from a July 29, 1977 "Final Order and Judgment" entered without consent or a trial. The order was allegedly entered as a result of a "settlement" which had never been approved by the governing body of Jersey City, and notwithstanding that: (1) the letter transmitting the order to the judge indicated that Jersey City had not consented to either the form or entry of the order; (2) an assistant corporation counsel of Jersey City had written a letter to the court and counsel indicating that the municipality had rejected the settlement; and (3) there had been no motion to enforce any alleged settlement. We reverse.

Jersey City had filed a complaint on February 13, 1975 against defendants Roosevelt Stadium Marina, Inc. (RSMI), Roosevelt Marina, Inc. (Marina), Captain's Table, Inc., Jack Jaffe and Irving Forman, as partners, Arthur Waltman, Jr. and Charles San Filippo. Jersey City sought recision of a 30-year lease between it and Jaffe based on various alleged breaches of the lease, including allegations of fraudulently depriving Jersey

City of rents to which it was entitled; failure to pay the cost of utilities; and conversion of utility services belonging to Jersey City. The lease covered 10 acres of unimproved waterfront property consisting of six acres of tidelands and four acres of upland located in the vicinity of what was then the Roosevelt Stadium parking lot. Jaffe had permission under the lease to operate a marina and construct a restaurant and administration building on the property. The constructed facilities were to revert to Jersey City when the lease expired on December 30, 1990.

Settlement negotiations regarding the lawsuit were undertaken between the parties. During the course of those negotiations, the prospect of a lease extension arose. Jersey City then filed a motion on November 29, 1976 to amend its complaint to request a declaratory judgment that an extension of the lease would not require public bidding, but could be accomplished through negotiations within the context of the litigation. Because of the length of time that had elapsed a court order was required before amending the complaint. See R. 4:9-1. We have found no record of any order disposing of the motion. Apparently it was never decided.

Settlement discussions took place over many months, and included conferences before a judge assigned for that purpose and presumably for eventual trial, if necessary. The record before us indicates that Jersey City's governing body had consistently declined or refused to approve any proposed settlement. The settlement issue was listed on the June 21, 1977 calendar for the regular meeting of the municipal council. The matter was considered at an open caucus meeting, but was deleted from the meeting agenda. It was apparently again considered on December 6, 1977 and tabled.*fn1 There had apparently

been a change in the membership of the governing body of Jersey City on July 1, 1977. What effect, if any, that had on the matter or the negotiations is unknown, and is immaterial. We are aware of the fact that on May 12, 1982 Jersey City authorized its planning board to prepare a blight study of the Roosevelt Stadium area. On November 24, 1982 the Municipal Council adopted a resolution approving the planning board's October 13, 1982 blight determination regarding the Roosevelt Stadium area. That action has no legal bearing on the issue of the validity of the July 29, 1977 "Final Order and Judgment."

The affidavits submitted in connection with Jersey City's June 1984 motion (originally returnable July 27, 1984) to vacate the July 29, 1977 order, display a difference of viewpoints among the attorneys for the respective sides as to whether it had been expressly stated, or understood, that municipal approval was required for any settlement. In any event, aside from the obvious proposition that a fact question may have existed as to what was said, and that a hearing might have been required on that basis, it would seem to be belaboring the obvious to observe that formal governmental action was required to approve a settlement. See discussion infra. Midtown Properties, Inc. v. Madison Tp., 68 N.J. Super. 197, 208 (Law Div.1961), aff'd o.b. 78 N.J. Super. 471 (App.Div.1963); City of Tulsa v. Oklahoma State Pen. & Retirement Bd., 674 P. 2d 10 (Okla.1983); 17 McQuillan, Municipal Corporations (3rd Ed.) ยงยง 49.33 and 49.38; and see also Note, "Apparent Authority of Agent of Municipality," 77 A.L.R. 3d 925 (1977).

After various exchanges of letters with an assistant corporation counsel of Jersey City then assigned to the matter, the

attorney for RSMI ultimately circulated a proposed consent order, reciting that all parties consented, and providing space for written consent of the attorneys for the parties.*fn2 The proposed order that was circulated was defective and a second proposed consent order was circulated. Neither was consented to on behalf of Jersey City.

On July 18, 1977 RSMI's attorney wrote to the judge, who was holding settlement conferences, as follows:

Enclosed please find the original and four copies of a proposed Final Order and Judgment and an affidavit of mailing in connection with the above. Notwithstanding the fact that the plaintiff received a copy of this Order several months ago, no consent to the form and/or entry has been given by the plaintiff. Mr. Mackey, Assistant Corporation Counsel for the plaintiff, appears to have encountered some difficulty with certain members of the City Council in his efforts to have the Council ratify this settlement. All defense counsel have consented to the form and entry of this Order and Judgment.

Rather than delay this matter any further, this proposed Order and Judgment is submitted under the five-day Rule. If written objections are submitted by the plaintiff, I would respectfully request Your Honor to set this down for argument on July 29, 1977.

Thank you for your cooperation and attention. [Emphasis added.]

Thus, although the attorney for RSMI indicated that defense

counsel consented*fn3 to the order, it was clear that counsel for RSMI knew that Jersey City's attorney had not obtained municipal approval and had not consented in any fashion to the order.*fn4 In that regard the proposed order contained only the simple recital that: "it further appearing to the Court after having considered the pleadings, pre-trial memoranda of counsel and settlement negotiations that good cause exists for the entry of this Order and Judgment. . . ." [Emphasis added].

On July 22, 1977 the then assigned assistant corporation counsel wrote to the judge, with a copy to RSMI's attorney, as follows:

This is to advise you that the City of Jersey City, the plaintiff in the above entitled litigation, objects to the proposed final order and judgment forwarded to you for signature by Lawrence ...


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