On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County.
Baime and Wallace. The opinion of the court was delivered by Wallace, J.s.c. (temporarily assigned).
This is an appeal from the grant of summary judgment in favor of plaintiff in two separate mortgage foreclosure complaints which were consolidated in the Chancery Division. Plaintiff is a New Jersey partnership which owned vacant land in South Brunswick Township. Defendant Joseph Stern is a real estate developer. Defendant Raymond Road II Corp. is a corporation owned and controlled by Stern. Defendant Eastern Homes, L.P. is a New Jersey limited partnership in which Stern is a general partner. Defendants contend that the trial court erred in denying their motion to release a portion of the property from the lien of the mortgage pursuant to the agreement. We disagree and affirm.
The facts are uncomplicated. On December 30, 1986, pursuant to an agreement dated November 21, 1983, plaintiff sold to defendants a portion of the land owned by plaintiff in South Brunswick on which defendants developed single-family homes and town houses known as "Princeton Walk." (Tract I). On May 2, 1989, plaintiff sold to defendants the balance of the land consisting of approximately 222 acres. (Tract II). The purchase price of Tract II was $7,390,184.97. The portion of the purchase price allocated in cash was $1,849,796.24. After taking into account "credits," defendants then gave plaintiff two promissory notes in the amount of $3,635,887.12 and $1,121,250 for the remainder
of the purchase price. Both notes were secured by a mortgage on Tract II.
The Rider to the mortgage provided in pertinent portion:
(A) Mortgagor shall be entitled to obtain, without charge or payments therefor, the release from the lien of this Mortgage of any open space, roads . . . [which] are otherwise required to allow for development of the subject property in accordance with Mortgagor's development plan . . . .
(B) Any payments made by Mortgagor for releases of land from the lien of this Mortgage shall be applied against the principal balance otherwise due hereunder.
(C) Mortgagor shall, at any time or times, be entitled to obtain the release of lands from the lien of this Mortgagee upon payment to the Mortgagee for each residential unit and related undivided interests in common elements so related an amount determined as follows:
(1) For each residential unit, including single family dwellings and townhouse units . . . to be released, there shall be paid . . . $13,000 [per unit]. In addition, for each acre not subdivided into units to be released from the lien of this Mortgage, there shall be paid . . . $40,000 [per acre].
[(2)] The location of released units and related undivided interests in common elements and/or released acreage shall be as ...