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K. Hovnanian at West Milford, L.L.C. v. Boulder Pond

March 13, 2008

K. HOVNANIAN AT WEST MILFORD, L.L.C., PLAINTIFF-RESPONDENT,
v.
BOULDER POND, L.L.C., DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. C-130-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 29, 2008

Before Judges Skillman, Yannotti and LeWinn.

Defendant Boulder Pond, L.L.C. appeals from an order entered on May 4, 2006, as amended by an order entered on May 23, 2006, which enforced the terms of a settlement agreement between defendant and plaintiff, K. Hovnanian at West Milford, LLC. For the reasons that follow, the appeal will be dismissed.

I.

The settlement enforced by the trial court arose from a contract for the sale of certain property in West Milford between defendant, as seller, and K. Hovnanian North Central Acquisitions, L.L.C., as buyer. The agreement states that the buyer would construct up to 320 market townhouses on the property. The buyer agreed to pay $18,000 for each approved unit. According to the contract, the purchase of any phase of the property did not obligate the buyer to purchase any additional phases. Closing on the first phase was set for thirty days after either the receipt by the buyer of all approvals that are necessary for the development of at least 288 units or twelve months after the date of the agreement, "but in no event later than 32 months from the date of [the] [a]greement."

The agreement additionally provides that, in the event that the buyer has not received all approvals within twelve months of the date of the agreement, the buyer could purchase four four-month extensions of time. The contract further provides that the:

[t]ime periods in this Agreement shall be extended by the length of time during which any moratorium is in effect as to utility connections or usage, approvals, permits or applications related to the development of the Premises. In no event shall any such time periods be extended or tolled for a period longer than one (1) year from the date(s) upon which Buyer and Seller receive notice as required by applicable law of said litigation, appeal or moratorium, unless such extension is agreed upon, in writing, by Buyer and Seller.

The contract further states that the "[b]uyer may waive the receipt of [a]ll [a]pprovals at any time and proceed to closing of title upon thirty (30) days written notice to [s]eller." After the contract was executed, K. Hovnanian North Central Acquisitions, L.L.C. assigned its rights and obligations under the agreement to plaintiff.

Thereafter, plaintiff purchased four of the extensions as permitted by the agreement. The parties later executed an amendment to the contract dated March 9, 2001, which stated that plaintiff had until January 10, 2002 to obtain all necessary approvals, and could purchase four additional three-month extensions of time, commencing on January 10, 2002. Plaintiff paid for the first of these extensions because it had not yet received a water allocation permit from the New Jersey Department of Environmental Protection (DEP) that was required for the development of the site. On March 11, 2002, the DEP issued an order holding in abeyance all water allocation permits due to a drought emergency.

On January 9, 2003, plaintiff filed a complaint in the Chancery Division seeking a declaratory judgment that the DEP's order constituted a "moratorium" under the agreement and therefore extended the time to close. In the complaint, plaintiff alleged that it had made additional payments for further extensions of the time to close, although it had not been required to do so. Plaintiff sought an order enjoining defendant from entering into a contract with any other party for the sale of the property.

On February 18, 2003, defendant filed an answer and counterclaim in which it alleged that plaintiff failed to seek the water allocation permit in good faith and was estopped by the payments it made pursuant to the contract for further extensions of time. Defendant also alleged that plaintiff breached the contract and therefore defendant was no longer bound by its terms.

Plaintiff filed an amended complaint on July 13, 2004, adding a count for specific performance. Plaintiff alleged that it had endeavored to close on the first phase of the property on November 5, ...


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