March 20, 2008
STEVEN L. LANG, PLAINTIFF-RESPONDENT,
JOHN HANNIGAN, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Chancery Division, General Equity Part, Sussex County, Docket No. C-32-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 11, 2007
Before Judges Fuentes and Chambers.
The discrete issue raised in this appeal concerns the exercise of discretion by the Chancery Division, General Equity Part. Specifically, whether the court abused its discretion by extending the time plaintiff had under a contract of sale to obtain approval to subdivide the property in question. In light of the record developed before the trial court, we discern no basis to interfere with the court's decision, and thus affirm.
We review the legal issue presented in the following factual context.
On February 16, 2006, defendant John Hannigan purchased property located at 30 Ramsey Road, in Wantage Township, Sussex County, consisting of 21.58 acres from plaintiff Steven L. Lang. The purchase price was $736,000. Under the express terms of the contract of sale, plaintiff had the responsibility to subdivide the property into four lots.
Once this was accomplished, defendant would sell back three of the four lots to plaintiff for nominal consideration, and retain title to the fourth lot described in the contract as an "approximate 6 acre tract which contains a residential dwelling." Plaintiff had one year from the date of closing to obtain the approval for the subdivision. If unable to do so within the one-year period, defendant was required to pay defendant $200,000 "for the additional acreage."
On May 12, 2006, plaintiff sent defendant the proposed subdivision packet for his signature.*fn1 In a letter dated May 19, 2006, defendant objected, arguing that the dimensions of the so-called "remainder lot" (5.51 acres) violated the clause of the contract requiring the lot to be "approximate[ly] 6 acres." In fact, according to defendant, the contract required the remainder lot to be a "MINIMUM of six acres."
In response to, but without conceding the validity of defendant's claims, plaintiff submitted revised plans reflecting the creation of two five-acre lots, a third lot of 5.142 acres, and a remainder lot consisting of 6.16 acres. According to plaintiff's engineer Kenneth Dykstra, the lot dimensions were derived to conform to the provisions of a local ordinance which required that "each lot provide 20,000 square feet of contiguous non-constrained land." Dykstra also reduced the dimension of the third lot to augment the size of defendant's remainder lot by .142 acres. The plan also dedicated 0.278 acres to meet the Township's right-of-way requirement.
Despite some initial controversy concerning the date of service, defendant concedes that he received these revised plans (dated July 20, 2006) on August 11, 2006. By letter dated August 15, 2006, defendant again rejected the proposed plan, insisting that the remainder lot be "approximately" 6.58 acres, as opposed to the 6.16 acres reflected in plaintiff's revised plans. To accomplish this, defendant suggested that the other three lots be exactly five acres.
By letter dated September 12, 2006, the municipal land administrator advised plaintiff that the only thing needed to complete the application was defendant's signature as the record owner. Confronted with defendant's position, plaintiff filed the first of two orders to show cause seeking judicial intervention to overcome the impasse.
The matter came before Judge Langlois on November 13, 2006. At this hearing, defendant emphasized his willingness to proceed without filing "papers" in response to plaintiff's version of events. According to defense counsel, the litigation was merely "a stall tactic," designed to frustrate the contractually established one-year deadline. Judge Langlois denied defendant's request, and carried the matter until November 28, 2006.
While the matter was pending, plaintiff submitted a second revised engineering plan showing three five-acre lots, and increasing the size of the remainder lot by .142 acres, for a total of 6.303 acres. The plan retained, however, the .278 acre dedication for a public right-of-way.
On the return date, Judge Langlois found these modifications acceptable, and directed plaintiff to proceed with the prosecution of the subdivision with sufficient dispatch to satisfy the contractual deadline of February 16, 2007. Thereafter, defendant executed the authorization to proceed.
On January 16, 2007, plaintiff presented to the Wantage Township planning board an application for a minor subdivision. It is clear from the record that the authorization executed by defendant after the court hearing only permitted plaintiff to present an application for a major subdivision. Defendant, who was present at the planning board hearing, immediately objected. Faced with this discrepancy, the planning board declined to consider the matter.
On January 20, 2007, plaintiff filed a second order to show cause seeking, inter alia, an order extending the time to obtain final subdivision approval. The matter again came before Judge Langlois on February 9, 2007. In the course of considering plaintiff's application, it became clear to the court that plaintiff had amended the application, from a major to a minor subdivision, without defendant's knowledge or consent.
A review of the record of the February 9, 2007 proceedings before Judge Langlois indisputably shows that she was initially prepared to rule in defendant's favor, and dismiss plaintiff's complaint. It is equally clear that faced with this outcome, plaintiff abandoned his request for an extension of time to pursue a minor subdivision application. Rather, as a fall back position, plaintiff simply requested that the court permit the planning board to rule on the pending (and complete) major subdivision application.
According to plaintiff's counsel, and as found by Judge Langlois, the planning board had two reasons for not ruling on the major subdivision application at the January 16, 2007 hearing: (1) to permit board members the opportunity to "walk through" the property; and (2) to afford objectors (other than defendant) the opportunity to present their arguments against approval. The board thus rescheduled a final vote on the major subdivision application for February 27, 2007. In this light, plaintiff requested that the court grant an extension of the February 16, 2007 contract deadline to February 27, 2007.
Judge Langlois granted plaintiff's extension request, conditioned upon plaintiff paying defendant's counsel fees incurred in defending against this second order to show cause. As Judge Langlois emphasized, the need for an extension was not created by any action or inaction of the plaintiff, but by the board's concern for affording potential objectors a full and fair opportunity to express their views. The award of counsel fees to defendant was intended by the court as a sanction, reflecting its strong disapproval of plaintiff's decision to amend the subdivision application without defendant's consent.
Defendant argues that the court erred by not enforcing the clear deadline negotiated by the parties, and established by the contract. We recognize that, under most circumstances, contracts are enforced as written. East Brunswick Sewerage Authority v. East Mill Associates, Inc., 365 N.J. Super. 120, 125 (App. Div. 2004). Notwithstanding this well-settled principle, courts of equity have the inherent authority to relax a contractual provision in order to avoid a particularly draconian result. Brower v. Glen Wild Lake Co., 86 N.J. Super. 341, 350 (App. Div.), certif. denied, 44 N.J. 399 (1965). Against the facts presented here, we discern no legal basis to conclude that the trial court's ruling amounted to reversible error.