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Waldstein v. Highview at Hawthorne Association

June 12, 2007

JAY WALDSTEIN AND KATHLEEN WALDSTEIN, PLAINTIFFS-APPELLANTS,
v.
HIGHVIEW AT HAWTHORNE ASSOCIATION, INC., LV&H MANAGEMENT CO., THE HIGHVIEW AT HAWTHORNE ASSOCIATION, INC. BOARD OF TRUSTEE MEMBERS: NEIL WESTERDUIN, JESSE SKLAR, BETH KRUEGER, DAN SAVERESE AND STEVE WHELAN, DEFENDANTS-RESPONDENTS, AND GREATER NEW YORK MUTUAL INSURANCE COMPANY, GOLD SQUARE CONSTRUCTION CO., INC., MEYER GOLD, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. PAS-L-834-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 23, 2007

Before Judges Wefing, Yannotti and Messano.

Plaintiffs Jay B. Waldstein and Kathleen A. Waldstein appeal from an order entered on September 23, 2005, which granted summary judgment to defendants Highview at Hawthorne Association, Inc. (Association); LV&H Consulting Group, Inc. (which had been improperly pleaded as LV&H Management Co., Inc.) (LV&H); and the members of the Association's Board of Trustees (Trustees), specifically, Neil Westerduin, Jesse Sklar, Beth Krueger, Dan Saverese, and Steve Whelan.*fn1 Plaintiffs additionally appeal from an order filed on December 22, 2005, which awarded defendants attorneys' fees and costs in the amount of $24,767.08 incurred by them in this litigation. For the reasons that follow, we affirm.

We briefly summarize the relevant facts, based on the evidentiary materials submitted to the trial court. Highview at Hawthorne (Highview) is a planned residential development consisting of 123 townhouse residences, and 86 single-family dwellings, along with certain common lands and facilities for the use of the unit owners. Gold Square constructed the development sometime in or about 1985, and later turned over control of the Association to the unit owners. The Association governs and manages Highview pursuant to an Amended Declaration of Covenants and Restrictions (Declaration) and its by-laws. In the Declaration, the single-family homes in Highview are classified as "Type I" units, and the townhouses as "Type II" units. The record owners in fee simple of any unit in Highview are members of the Association and have the privilege to use the common areas and facilities.

Plaintiffs purchased a townhouse in the development in January 2003. Plaintiffs allege that in April 2003, they discovered that "a sewer pipe broke as a result of a slab failure causing water and sewage to collect beneath [the] concrete slabs of [their] townhouse." An investigation was conducted and, according to plaintiffs, it "revealed that the ground floor slab failed causing the pipe to break." It appears that the failure of the slab was due to a defect in the initial construction of the unit; an interior foundation of plaintiffs' unit had not been built. In August 2003, plaintiffs submitted a claim to the Association and LV&H, the Association's managing agent, seeking damages for the cost to repair and reconstruct the floor slab and the sewer pipe. The Association denied the claim.

Plaintiffs thereafter commenced this action in which they sought a declaratory judgment that the Association was required to pay the cost to repair the damage resulting from the failure of the floor slab in their townhouse; compensatory damages; attorneys' fees; and costs of suit. Defendants moved for summary judgment. Plaintiffs opposed the motion, and filed a cross-motion for summary judgment. The motions were heard on September 9, 2005. The judge placed his decision on the record on that date, and entered an order on September 23, 2005, granting defendants' motion.

The judge found that the Association had no obligation under the Declaration to pay for the cost to repair the damage resulting from the failure of the floor slab. The judge granted defendants' motion for summary judgment. Plaintiffs thereafter moved for reconsideration. That motion was denied by order entered on November 4, 2005. The judge subsequently granted defendants' motion for an award of attorneys' fees and costs incurred in this litigation, and awarded defendants $24,767.08. This appeal followed.

We turn first to plaintiffs' contention that they are entitled to reimbursement for the cost of repairing the damage that resulted when the floor slab failed. In support of this argument, plaintiffs rely upon Article IX, Section 5 of the Declaration, which states:

Each townhouse Owner, by acceptance of ownership, agrees and covenants that if his townhouse, including any party walls, shall be fully or partially destroyed by fire or otherwise, the Association shall reconstruct said townhouse expeditiously, pursuant to plans approved by the Board of Trustees. Any reconstruction shall be subject to all other applicable provisions of this Declaration and applicable governmental regulations.

However, "'[i]ndividual clauses and particular words must be considered in connection with the rest of the agreement, and all parts of the writing and every word of it, will, if possible, be given effect.'" Krosnowski v. Krosnowski, 22 N.J. 376, 387 (1956) (quoting 9 Williston on Contracts § 46 (rev. ed. 1945)). A contract "must be read as a whole without focus on an isolated phrase." AXA Assurance, Inc. v. Chase Manhattan Bank, 339 N.J. Super. 22, 26 (App. Div. 2001) (citing Wheatly v. Sook Suh, 217 N.J. Super. 233, 239 (App. Div. 1987)). Therefore, in order to determine the meaning of Section 5 of Article IX, we must consider other sections of the Declaration.

Article IX is entitled, "Insurance." Section 1 of that Article requires the Association to provide public liability insurance covering the common areas and recreational facilities in the development. Section 1 also requires the Association to provide workers' compensation insurance, and coverage to indemnify its officers and employees.

Section 2 of Article IX provides that owners of Type I dwellings must carry "such full broad form fire, casualty and extended coverage on their property as they shall deem in their best interests." Owners of Type I units also must carry public liability coverage ...


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