October 23, 2007
CPG TINTON FALLS URBAN RENEWAL, LLC, INDIVIDUALLY AND AS ASSIGNEE OF THE BOROUGH OF TINTON FALLS, PLAINTIFF-RESPONDENT,
THE TOWNSHIP OF NEPTUNE AND THE MAYOR AND TOWNSHIP COMMITTEE OF THE TOWNSHIP OF NEPTUNE, DEFENDANTS-APPELLANTS.
On appeal from the Superior Court of New Jersey, Chancery Division, General Equity Part, Monmouth County, Docket No. C-163-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 10, 2007
Before Judges Weissbard and Gilroy.
This appeal arises out of a breach of contract action where plaintiff, CPG Tinton Falls Urban Renewal, LLC, (CPG) individually and as assignee of the Borough of Tinton Falls (Borough), seeks enforcement of its rights under a five party property owners' agreement (POA) against defendants, the Township of Neptune (Township), and the Mayor and Township Committee of the Township of Neptune. Defendants appeal from the August 4, 2006, order of the Chancery Division, General Equity Part, that granted CPG summary judgment and injunctive relief. We affirm.
CPG is the owner of property designated as Block 135, Lots 1.01, 4, 6.01, and 7.01 on the tax map of the Borough and Block 1508, Lots 1 and 2 on the tax map of the Township. CPG possesses final site plan approval from the Borough to construct the Jersey Shore Premium Outlet Center (the Outlet Center). Although the Outlet Center is to be constructed within the Borough near State Route 66, it will not abut the roadway. Accordingly, vehicular access to and from the Outlet Center via State Route 66 requires the construction of a new bridge overpass over State Route 66, together with ramps to and from the bridge overpass (collectively, the Project).
State Route 66 is a major roadway that runs in an easterly/westerly direction in the area of the proposed Outlet Center with the Borough lying to the north of the roadway and the Township to the south. On August 8, 2001, the two municipalities entered into the POA with three major private property developers: Joven Centre, Inc., predecessor in title to CPG's property; Commercial Realty and Resources, Inc.; and Hovtowne, Inc., owners of properties lying to the south of Route 66. Under the POA, the parties contemplated future development along Route 66, requiring the construction of the Project, as approved by the New Jersey Department of Transportation (DOT) in a collateral agreement referenced in the POA, to provide ingress and egress to and from the property, then owned by Joven Centre, as well as other properties lying to the north of Route 66. All parties acknowledged in the POA that each would derive "substantial benefits from the construction of [the Project]."
The POA provided that the Project was to be designed in accordance with DOT approval, placed "for bid to DOT qualified contractors with the appropriate classification in accordance with applicable public bidding law requirements" and constructed by the Borough under the supervision of its engineer and the DOT. In consideration of constructing the Project and other improvements referenced in the POA, the Township consented to the construction of the Project and agreed "to accept dedication of those portions of the Project situate within the Township" and to be responsible for the cost of maintenance of the same. Attached to the POA was a copy of the agreement between the Borough and the DOT, pertaining to the Project, to which was attached a conceptual plan depicting the proposed location of the Project. The POA did not prohibit any party from assigning its contractual rights and obligations under the agreement.
Between March 2002 and June 2005, the Borough through its engineer, commenced preparing preliminary design engineering documents and obtaining DOT design approval for the Project. On August 24, 2004, Joven Centre assigned its contractual rights under the POA to CPG. On June 29, 2005, the Borough assigned certain of its contractual rights and obligations under the POA to CPG to facilitate construction of the Project. However, oversight of the construction of the Project remained under the supervision of the Borough's engineer and the DOT. On November 30, 2005, the DOT gave final approval to the construction plans. Upon receipt of final approval, the same engineering firm that had prepared the design engineering documents on behalf of the Borough, drafted the proposed construction contract and bid specifications for the Project. On December 15, 2005, CPG solicited bids for the Project in accordance with the standards for bidding a public construction contract, and sealed bids were received on March 21, 2006. Under the bid documents, CPG was scheduled to award the Project construction contract on or before June 19, 2006. The DOT permits for the project would expire in January 2007, unless work commenced on the Project prior thereto.
Although having supported the Project from 2001 to 2005, defendant Mayor and Township Committee commenced voicing opposition to the Project in mid-2005. On January 9, 2006, the defendant Township Committee adopted Resolution No. 06-67 entitled "Declare the Five Party Agreement for the Construction of the State Highway Route 66 Overpass and Victoria Boulevard Extension Null and Void." On the same date the Township Committee adopted Resolution No. 06-72 entitled "Request the New Jersey Department of Transportation to Revoke Highway Access Permit S-66-C-0036-2002 and S-66-C-0037-2002." Both permits are necessary for construction of the Project. In or about May 2006, CPG offered the deeds of dedication corresponding to those portions of the Project lying within the Township, requesting that the Township confirm its intention to accept the deeds of conveyance. After the Township failed to respond, CPT instituted the present action by complaint and order to show cause (OTSC), seeking injunctive relief, prohibiting defendants from interfering with the project, and for specific performance, compelling defendants to comply with all terms and provisions of the POA.
On the initial return date of the OTSC, the trial court heard argument of the parties, but did not rule on CPG's application for a temporary restraining order. On June 30, 2006, determining that no material issues of fact existed, the trial court converted the matter into a summary judgment proceeding and granted CPG summary judgment: 1) permanently restraining and enjoining defendants from interfering in any manner with the construction of the Project as set forth in the POA; and 2) directing defendants specifically perform in good faith their contractual obligations under the POA, including but not limited to, executing all documents and accepting all deeds and dedication and easements as may be necessary to construct and operate the bridge overpass from Route 66 and associated ramps and roadways. A confirming order was entered on August 4, 2006.
On appeal, appellants argues:
AS A MATTER OF LAW, ONE MUNICIPLITY MAY NOT DECLARE ANOTHER'S LAND IN NEED OF "REDEVELOPMENT"; IF THE LOWER COURT WISHED TO DISPOSE OF THIS MATTER SUMMARILY, IT SHOULD HAVE UPHELD NEPTUNE'S SOVEREIGNTY AND DISMISSED [CPG'S] COMPLAINT.
BY CONVERTING A TRO HEARING INTO CROSS-MOTIONS FOR SUMMARY JUDGMENT, THE CHANCERY COURT OVERLOOKED CRUCIAL MATERIAL ISSUES OF FACT.
A. THE PARTIES HAD MATERIALLY DIFFERENT UNDERSTANDINGS OF A DECIDEDLY AMBIGUOUS AUGUST 8, 2001 AGREEMENT; THE CHANCERY COURT SHOULD NOT HAVE DECIDED THIS MATTER AGAINST NEPTUNE SUMMARILY.
B. THE BREACH OF CONTRACT AND BAD FAITH ALLEGATIONS SHOULD NOT HAVE BEEN DECIDED SUMMARILY.
C. THE CHANCERY COURT IMPROPERLY ENTERED SUMMARY JUDGMENT AGAINST NEPTUNE BASED ON ESTOPPEL.
THE CHANCERY COURT FAILED TO BALANCE THE EQUITIES BEFORE ISSUING A FINAL JUDGMENT WITHOUT THE BENEFIT OF A TRIAL OR ANY OPPORTUNITY AT DISCOVERY. (NOT RAISED BELOW).
THE LOWER COURT ERRONEOUSLY HELD THAT NEPTUNE WAS STATUTORILY REQUIRED TO ACCEPT A ROAD DEDICATION.
THE LOWER COURT ERRONEOUSLY GRANTED SUMMARY JUDGMENT BASED ON THE ISSUANCE OF DOT PERMITS.
We have considered defendants' arguments in light of the record and applicable law. We are not persuaded by any of them and affirm substantially for the reasons articulated by Judge Lehrer in his cogent and comprehensive oral opinion of June 30, 2006. The trial judge's findings were supported by substantial and credible evidence in the record. R. 2:11-3(e)(1)(A); Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974). Except as discussed below, none of defendants' contentions have sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Defendants argue that the trial judge erred in converting the application for a temporary restraining order into a summary judgment proceeding. Defendants contend that they never acquiesced to such a change in the proceeding. Alternatively, defendants assert that there were material issues of fact concerning: 1) "the parties' understanding of their rights and obligations under the August 8, 2001 Agreement;" 2) "the parties' good faith (or bad faith) in enforcing their rights and carrying out their obligations under the contract;" and, 3) "whether one of the parties should have been equitably barred from relief under the doctrines of estoppel and/or laches." We disagree.
We are satisfied from our review of the June 30, 2006, transcript of the continued hearing on CPG's application for a preliminary restraint that defendants consented to the trial court's conversion of the matter to a motion for summary judgment:
The Court: Please be seated everybody.
Thanks. I just had a conference with counsel in chambers and I am not trying to give . . . anybody a hard time. Everybody has done a wonderful job on both sides. But it seems to me that what this really is is a motion for summary judgment. Although it's initially couched in terms of a notice of motion for a preliminary injunction. The same facts are going to be before this [c]court today as they will be four or five months from now and it basically is a legal issue of the interpretation of persons, people's responsibility under a contract.
So in order to save the Township of Neptune time and money and counsel fees and in order to save the other side time and money and counsel fees, it is my inclination to decide this matter as a motion for summary judgment, make a final decision today and if somebody is displeased with it, I presume the appellate division will tell me whether I was right or wrong months or years from now.
[Plaintiff's Counsel]: That's acceptable to the plaintiff, judge.
[Defendents' Counsel]: It is, Judge.
Moreover, even if we are mistaken as to our interpretation of the colloquy between the trial court and counsel, we are satisfied that the trial court correctly converted the matter to a summary judgment proceeding.
A trial court has discretion to convert an application for a temporary restraining order into a motion for summary judgment. See Concerned Citizens of Borough of Wildwood Crest v. Pantalone, 185 N.J. Super. 37, 48 (App. Div. 1982) (determining that a trial court has discretion to convert an application for injunctive relief into a motion for summary judgment on the return date of an order to show cause when there is no material facts in dispute); Enourato v. N.J. Bldg. Auth., 182 N.J. Super. 58, 64-65 (App. Div. 1981) (holding that a trial court has discretion to grant summary dismissal of a complaint on a return date of an order seeking a preliminary restraint against the issuance of public bonds), aff'd, 90 N.J. 296 (1982).
Accordingly, the question is whether the trial court properly exercised its discretion in converting the matter to a summary judgment proceeding and hearing the matter summarily. We are satisfied the court did not abuse its discretion in converting the matter to a summary judgment proceeding and correctly decided the issues as matters of law. We perceive no prejudice to defendants in adjudicating the issues in a summary matter. The court's action in converting the matter was not on the initial return date, but on the continued return date, after defendants briefed the issues and submitted papers in opposition to the relief requested. Further, the trial judge provided defendants' counsel ample opportunity to be heard on the issues before deciding the matter.
A trial court will grant summary judgment to the moving party "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c); see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). "An issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." R. 4:46-2(c).
On appeal, "the propriety of the trial court's order is a legal, not a factual, question." Pressler, Current N.J. Court Rules, comment 3.2.1 on R. 2:10-2 (2008). "We employ the same standard that governs trial courts in reviewing summary judgment orders." Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).
Contract interpretation is a generally legal issue for the court to decide in the first instance. Driscoll Constr. Co., Inc. v. State, Dep't. of Trans., 371 N.J. Super. 304, 313 (App. Div. 2004). "The polestar of contract construction is to discover the intention of the parties as revealed by the language used by them." Karl's Sales and Serv., Inc., v. Gimbel Bros., Inc., 249 N.J. Super. 487, 492 (App. Div.), certif. denied, 127 N.J. 548 (1991). In order to do so, the language used must be interpreted "in accord with justice and common sense." Ibid. "An agreement must be construed in the context of the circumstances under which it was entered into[,] and it must be accorded a rational meaning in keeping with the expressed general purpose." Tessmar v. Grosner, 23 N.J. 193, 201 (1957); see also, City of Orange Twp. v. Empire Mortg. Serv., Inc., 341 N.J. Super. 216, 224 (App. Div. 2001) (holding that "[w]here the terms of a contract are clear and unambiguous[,] there is no room for interpretation or construction and the courts must enforce those terms as written").
A court has no right to rewrite the terms of a contract "merely because one might conclude that it might well have been functionally desirable to draft it differently." Id. at 224. Nor will a court "make a better contract for parties than they themselves have seen fit to enter into, or alter it, for the benefit of one party and to the detriment of the other." James v. Fed. Ins. Co., 5 N.J. 21, 24 (1950). Where the parties' intention is "doubtful or obscure, the most fair and reasonable construction, imputing the least hardship on either of the contracting parties, should be adopted so that neither will have an unfair or unreasonable advantage over the other." Tessmar, supra, 23 N.J. at 201. (internal citations omitted).
Defendants argue that the Borough did not possess the contractual authority to assign certain of its rights and obligations to CPG without first obtaining the consent of all other parties to the POA. We are satisfied that no prior approval was required. An assignment of contractual rights and obligations is permitted absent an expressed contractual prohibition, Aronsohn v. Mandara, 98 N.J. 92, 99 (1984), and the POA did not contain a prohibition against assignment. Moreover, Paragraph 12 of the POA implied that assignments were permitted:
"This Agreement shall be binding upon and shall inure to the benefit of the Parties, their successors and/or assigns." (emphasis added).
Defendants contend that Paragraph 7 of the POA supports their assertion that the Borough was required to obtain approval of the Township before assigning any of its rights to CPG.
This Agreement may be amended, modified or supplemented in writing from time to time, with the consent of the parties when necessary or desirable to implement the understanding of the parties hereto and/or to facilitate the financing of the Project.
This Agreement shall be enforced in accordance with the terms of any amendment or modification or supplement thereof.
Defendants' reliance on Paragraph 7 is misplaced. Paragraph 7 does not speak to assignments, only amendments, modifications, or supplements to the POA. CPG, as assignee of the Borough, seeks to enforce the POA as originally agreed upon by the parties.
We are satisfied that Judge Lehrer correctly determined that there were no issues of fact concerning the parties' rights and obligations under the POA and properly granted summary judgment and permanent injunctive relief.
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