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Park Hamilton Condominium Association, Inc. v. Park Hamilton

January 24, 2007

PARK HAMILTON CONDOMINIUM ASSOCIATION, INC., PLAINTIFF-APPELLANT,
v.
PARK HAMILTON, L.P., A BUSINESS OR ASSOCIATION OF BUSINESSES OF THE STATE OF NEW JERSEY, DEFENDANT, AND PARK HAMILTON, L.P. NO. 1, A LIMITED PARTNERSHIP OF THE STATE OF NEW JERSEY, PARK HAMILTON, L.P. NO. 3, A LIMITED PARTNERSHIP OF THE STATE OF NEW JERSEY, AND ROBERT LEHRER, DEFENDANTS/THIRD-PARTY PLAINTIFFS-RESPONDENTS,
v.
CRAIG WOHLERS, ROBERT COTNOIR, CELESTE FRASER, BRIAN LEE, MICHAEL SING, NEIL STERNBERG, AND ROWINN, INC., THIRD-PARTY DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, L-4892-03.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 13, 2006

Before Judges Lefelt, Parrillo and Sapp-Peterson.

This case involves ownership of an outdoor parking lot (the east lot) consisting of 8,334 square feet containing thirty-seven exterior parking spaces. Plaintiff Park Hamilton Condominium Association (plaintiff or Association) claims the east lot is a common element owned by the Park Hamilton Condominium. Defendant Park Hamilton L.P. No. 3 (defendant), which owns the commercial unit in the complex -- an indoor parking garage -- claims title to the disputed area. The trial court ruled in favor of defendant by order of May 28, 2004, and consequently, on January 21, 2005, entered judgment reforming the master deed to reflect its earlier ruling. Plaintiff appeals, and we affirm.

Some background is in order. Park Hamilton Condominium, located at 205 Tenth Street in Jersey City, consists of ninety-one residential units and one commercial unit, an indoor parking garage containing 74 parking spaces. Its developer was 205 Tenth Street U.R. Associates, L.P. Plaintiff is a condominium association, created pursuant to the New Jersey Condominium Act, N.J.S.A. 46:8B-1 to -38, with by-laws governing its administration. Specifically, plaintiff is a New Jersey nonprofit corporation formed to administer, manage and operate the common affairs of the unit owners of the condominium and to maintain, repair and replace the general and limited common elements of the condominium as provided in the master deed and by-laws.

The developer, who retained ownership of the commercial unit, recorded the master deed of the condominium on December 9, 1988. The master deed does not include the east lot as part of the commercial unit, which is described as follows:

The Commercial Unit shall consist of the areas measured horizontally between the interior or exposed surfaces of masonry walls enclosing the Commercial Unit and the area measured vertically from the top of the concrete floor of the lowermost level of the Commercial Unit to the underside of the concrete ceilings of the uppermost level of the Commercial Unit. However, any Common Elements located within the Commercial Unit shall not be considered a part of the Commercial Unit.

However, the condominium's public offering statement (POS), dated May 4, 1987, does include the exterior parking spaces within the definition of commercial unit. Thus, the POS provides in pertinent part:

The Commercial Unit is being retained by the Sponsor and will consist of portions of the first floor of the building and the parking areas on the property. The Commercial Unit is not being offered for sale pursuant to this Offering Statement. Sponsor's present intention is to convert this space to a 91 unit parking garage and to offer parking garage leases located within the Commercial Unit to Unit Owners . . . . Unit Owners are not guaranteed[,] however, that such parking garage spaces will be available for their use and must enter into a lease with the Commercial Unit Owner to secure a garage space. [(emphasis added).]

The POS later refers to the commercial unit as "comprised of portions of the first floor of the building wherein a parking garage is to be located and the parking areas on the property."

According to Eric Silverman, a partner in the developer, it was the developer's intention to create a ninety-one space parking area using both the interior garage and the east lot. He further suggested that references in the POS to the term "parking garage" were to the area within the building. In any event, Silverman represented that the developer never intended to convey title to the exterior lot to plaintiff, having operated the east lot as its own and having rented parking spaces to unit owners the entire time it owned the commercial unit until it transferred title to Rowinn, Inc. on October 2, 1992. From then until October 14, 1994, Rowinn rented parking spaces to unit owners in both the interior garage and the exterior lot. In 1994, Rowinn sold the commercial unit to defendant and since then, defendant has rented parking spaces on the east lot to unit owners. Throughout this fifteen-year period, the unit owners never tended to the exterior parking lot although it was included in their individual tax assessments.

Despite the tax assessments, neither plaintiff nor any individual unit owner ever challenged defendant's ownership of the east lot until now. In fact, in a November 1, 1996 lawsuit filed by plaintiff against defendant for unpaid maintenance fees owed the Association for seventeen units including the commercial unit, plaintiff secured a final judgment by default in the amount of $43,011.64 and an order requiring satisfaction of judgment by the collection of rents for parking spaces owned by defendant, including those on the east lot.

On September 15, 2003, plaintiff filed a six-count complaint seeking, among other things, a declaration that plaintiff owns the east lot as a common element pursuant to the condominium master deed recorded on December 8, 1988.*fn1 Defendant filed an answer, counterclaim, and third-party complaint. In its answer, defendant asserted eleven separate defenses including estoppel, laches and the entire controversy doctrine. In its counterclaim, defendant sought reformation and correction of the master deed to provide a description of the commercial unit that includes the exterior parking lot.*fn2 Cross-motions for summary judgment were filed and following argument, the judge dismissed plaintiff's complaint with prejudice, finding defendant was the owner of the east lot, and also granted summary judgment on defendant's counterclaim to reform the master deed. The judge reasoned that due to an error in the master deed, the east lot was not listed as part of the commercial unit; however there was clear and convincing evidence that the developer's intent was to retain ownership of the exterior parking spaces and not convey title to plaintiff or the unit owners. Consequently, on January 21, 2005, the court entered an ...


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