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Levin Properties, L.P. v. Nouvelle Associates

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


April 2, 2009

LEVIN PROPERTIES, L.P., PLAINTIFF-APPELLANT,
v.
NOUVELLE ASSOCIATES, LLC, CENTRE STREET PROPERTIES, LLC AND PLANNING BOARD OF THE TOWNSHIP OF SPARTA, DEFENDANTS-RESPONDENTS.

On appeal from Superior Court of New Jersey, Law Division, Sussex County, Docket Nos. L-401-06 and L-521-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 28, 2008

Before Judges Winkelstein, Fuentes and Chambers.

Defendant Centre Street Properties L.L.C., is the owner of a track of land located at 25 Centre Street in the Township of Sparta. This land is part of a shopping center, and contained a movie theater that has since been demolished. With Centre Street Properties's authorization, defendant Nouvelle Associates, L.L.C. ("Nouvelle"), applied to the Planning Board of the Township of Sparta to develop the movie theater lot. If approved, the project would require a number of "c" variances*fn1, including one for parking. As a means of ameliorating the parking problem presented by the proposed expansion, Nouvelle argued for the Board to recognize the manner in which the center's parking spaces have been historically shared by all of the businesses located within the shopping center.

Plaintiff, Levin Properties L.P. ("Levin"), is the owner of another commercial property located within the shopping center. Levin opposed Nouvelle's application arguing that a restrictive covenant in its deed prohibits other establishments in the shopping center from using the parking spaces attributable to its property.

The Planning Board granted Nouvelle's application. Although declining to determine the legal relationship and property rights of the various occupants of the shopping center, the Board found that "the historical use of the parking lot by all of the patrons of all of the uses within the Center is common and has existed for perhaps as long as fifty to sixty years."

Levin appealed the Board's decision to the Law Division in an action in lieu of prerogative writs. After hearing the arguments of counsel and reviewing the record developed by the parties, the trial court upheld the Planning Board's decision.

The court found that: (1) historically, all of the various commercial establishments have shared the shopping center's open parking lot in common; and (2) the common grantor of the parties' lots created a "neighborhood scheme" wherein reciprocal parking easements were established in favor of all lot owners. Levin now appeals, arguing that the trial court erred in applying common law principles derived from the law of easements to nullify the restrictive covenant rights conferred to it by the original grantor, as reflected in its deed of title. Levin argues that the Planning Board's action granting Nouvelle's application was arbitrary, capricious and unreasonable, because without access to Levin's parking spaces, Nouvelle is not entitled to the required parking variance.

We reject these arguments and affirm. We are satisfied that the various deeds issued by the common grantor conveying the shopping center's lots reveal the intent to establish reciprocal parking easements to be enjoyed by all lot owners. The restrictive language in Levin's deed appearing to grant Levin an exclusive access to a certain parking area is subordinate to, and otherwise superseded by, the neighborhood scheme created by the common grantor. There is thus ample evidence in the record supporting the Planning Board's approval of the parking variance.

I.

The shopping center property at issue here is located on Woodport Road/Route 181 in the downtown area of Sparta. St. Cloud Building Corporation ("St. Cloud") owned the property as a one ten-acre parcel until the early 1950s. Beginning in 1950, St. Cloud subdivided the property and began selling it as separate parcels for commercial use. The subdivision created twelve numbered lots, ranging from lot 16 through 27 of Block 13.01 on the tax map. At that time, the majority of the lots were undeveloped. Lot 21, however, contained a movie house known as the Sparta Theatre.

A. Title History

St. Cloud sold three of the original ten lots in the early 1950s. These three title transfers were memorialized as follows: (1) deed dated November 20, 1950, Lot 24 to Fred H. and Elsie Gammelin; (2) deed dated December 9, 1952, Lot 26 to William and Stephen Muller; and (3) deed dated April 20, 1954, Lot 16 to John E. Herbison. All three deeds contained the following provision:

3. The right and permission is hereby given to the Grantees, their heirs, executors, administrators, heirs and assigns, their friends, customers, agents and any person desiring to come to said premises so occupied, owned or used, or otherwise, to have the full right and privilege of using any of the parking areas, roadways, curbs or sidewalks now in use and being or hereafter constructed on the lands hereinbefore described, provided, however, that such privilege of user shall not in any way be permitted to interfere with the primary right of the Grantor and St. Cloud Amusement Corp., their successors and assigns, to the use of said facilities in connection with the operation of Sparta Theatre and, provided further, that Grantor and St. Cloud Amusement Corp., their successors and assigns, shall be entitled to establish reasonable rules and regulations for the use of said facilities and any and all parties who may own, lease or be entitled to the possession of said hereinbefore described lands shall be obliged to conform to said rules and regulations which shall, as well, be binding upon their employees, licensees and invitees.

By deed dated February 12, 1957, St. Cloud sold Lots 22 and 23 to Phillip J. Levin. This deed, however, contains the following provision, specifically labeled as "restrictive covenants to run with the land."

1. The right and permission is hereby given to [Levin], his heirs and assigns, his friends, customers, agents and invitees, to have the full right and privilege of using any of the parking areas, roadways, curbs or sidewalks now in use and being hereinafter constructed on the lands retained by the Grantor, provided, however, that such privilege of user shall not in any way be permitted to interfere with the primary right of the Grantor and St. Cloud Amusement Corp., their successors and assigns, to the use of said facilities in connection with the operation of Sparta Theatre.

2. Such property shall not be used at any time for or any improvement be erected thereon lending itself to the conduct of an amusement enterprise which shall in any way be competitive with the operation of said Sparta Theatre and the operation of said theatre shall be deemed to include the presentation of motion pictures, vaudeville, entertainments by performers and bands of all character and presentation of televised events, pictures and performances of all kinds.

3. Upon erection or construction of any improvement on any such property, the party in possession thereof shall be obligated to reimburse the St. Cloud Amusement Corp., its successors and assigns, for its proportionate share of the cost of maintaining and repairing the parking area, roads, curbs, sidewalks, street and parking area lighting equipment and decorative plazas and likewise, the cost of cutting grass, removing snow and ice and providing street and parking area lighting. . . . The amount to be expended, the character of the work to be done and the necessity for such work in any of the categories above described, shall consist of reasonable repairs and maintenance only, and shall be completely within the control and determination of St. Cloud Amusement Corp., its successors and assigns, and they will have no obligation or duty to consult with or obtain the approval of any of said parties in possession as a condition to the imposition of liability on such parties pursuant to the requirements thereof.

6. [Levin] herein expressly agrees to keep the entire second course (a line 180.42 feet in length) free and open at all times, and agrees not to erect a fence, barrier or other obstruction along the same. The Grantor herein hereby also covenants and agrees that it, in turn, will not construct, erect or maintain any fence, barrier or other obstruction along its side of the said boundary line.

The purpose of this covenant is to keep the said boundary line open to permit the free flow of traffic between the above described lands and remaining lands of Grantor. It is distinctly understood, however, that this restriction is not intended, nor shall the same be construed, as a reservation by the Grantor of any right to park its vehicles or the vehicles of its successors, assigns, tenants, customers, agents or invitees, o[n] any part of the above described lands. (Emphasis added.)

Levin first developed the property by erecting an Acme Super Market. According to Levin, the site currently contains a CVS Pharmacy, a pizza restaurant, a home furnishings store, and 100 appurtenant parking spaces.

After Levin acquired title to his property, St. Cloud sold the remaining lots to three individuals. In April and June 1960, St. Cloud transferred Lots 19 and 20 to Sussex Lanes, for the purposes of developing a bowling alley. These deeds contained the identical language with respect to the use of the parking area reflected in the three deeds executed and filed in the 1950's. St. Cloud retained Lot 21, the Sparta Theatre lot. In January 1972, St. Cloud sold Lot 21 to Eagle Properties. This deed did not contain the specific easement language. The deed simply states that the lot was "subject to rights granted to others and mentioned in the various instruments." Centre Street Properties was the owner of the theatre lot by the time the Nouvelle application came before the Sparta Planning Board.

B. Nouvelle's Application to the Sparta Planning Board

With the consent of Centre Street Properties, Nouvelle filed an application for preliminary and final site plan approval with the Sparta Planning Board as part of a plan to redevelop the Sparta Theatre lot. Nouvelle sought approval to replace the existing two-cinema Sparta Theatre with a structure that would include: (1) a new "tri-plex" movie theater; (2) a Panera Bread restaurant and a Rita's Ice Cream stand; and (3) second floor rentable office space.

If approved, the project would require certain bulk "c" variances, specifically: (1) front, rear, and side yard setbacks; (2) parking; (3) placement of a retaining wall; (4) maximum percentage of impervious coverage; and (5) placement of signage. With respect to parking, Nouvelle acknowledged that under the Sparta ordinance, the project would need to provide a total of 170 parking spaces.

In an effort to address the municipal parking requirement, Nouvelle proposed to maintain the existing eighty parking spaces. The non-theatre uses (Panera Bread, Rita's, and office space) would require parking during normal daytime business hours; the Sparta Theatre would utilize the same parking spaces during its hours of operation in the early evening and late night hours. Thus, taking advantage of the absence of a temporal overlap in the operation of these distinct businesses, Nouvelle argued that the uses were complimentary, allowing for a shared parking scheme.

The Planning Board heard Nouvelle's application at public meetings held on April 19 and May 3, 2006. At the May 3, 2006 hearing, the Planning Board heard from Gordon Meth, Nouvelle's traffic and parking expert. In both a written report and through his testimony, Meth acknowledged that all existing uses in the entire Sparta Theatre plaza would require 605 parking spaces under the Sparta ordinance. At that time, however, the Plaza had only 373 parking spaces. Moreover, Nouvelle's proposed project would increase this shortfall by thirty spaces, making the overall parking requirement 635 spaces. Meth calculated the existing parking demand by observing the number of parking spots used at various times during the week. He determined that, in May 2006, the highest utilization of the shopping mall's parking facilities occurred at Friday 6:30 p.m., when 63% of the existing 373 parking spaces were occupied. Meth next calculated the projected utilization of parking spaces by Nouvelle's proposed use of the theatre property.

Using a method of calculation known as the "85th percentile," (designed to over-estimate the probable parking demand thereby creating a "worst case scenario") Meth opined that the highest average demand for parking would be on Fridays at 6:30 p.m., when 90% (334 out of 373 spaces) of the available parking would be utilized. Using the "85th percentile" method, Meth determined that the "worst case scenario" (Friday 6:30 p.m.) would require 101% of the available parking. This left a deficit of four parking spaces (377 spaces needed; 373 existed). Based on these findings, Meth concluded that a parking variance for the Theatre Plaza can be granted without creating a significant parking deficiency.

The Planning Board granted Nouvelle's application and variances in a resolution dated June 7, 2006. In so doing, the Board made the following findings:

[T]he ordinance requires a total of 140*fn2 parking spaces for these uses and therefore, the Applicant is seeking a variance to allow the proposed uses with the existing parking arrangements that currently exist in the center, but with a revision to increase by re-striping the 80 parking spaces on Center Street to allow 88 parking spaces after the re-striping. The Applicant's attorney indicated at the May 3, 2006 meeting that it is [his] legal opinion that the parking arrangements at the Theatre Center parking lots are shared parking arrangements created initially by deeds in the 1950s and 1960s and that the property owners with property in the Center, including the Theater are authorized to cross the lands of others within the Center and to park on the same. . . .

The Applicant's Professional Planner, Mr. Dykstra testified that the proposed use and parking would be consistent with the shared parking and combination of uses recommend[ed] in the Sparta Town Center Master Plan provisions. He also opined that the uses and shared parking will be compatible with the other nearby uses. It was his opinion that grants of the variances would benefit the purposes of zoning and that the benefits would outweigh the detriments.

5. The owner of Levin Management of adjacent lot 22, adjacent to the Theatre building and lot, contends through its attorney, Bruce Samuels, Esq., that its rights to its parking lot are exclusive to others.

6. The Board Attorney confirmed that the Board has no jurisdiction to determine the real property interests and legal relationships between the parties and that only the Superior Court can make determinations as to the legal rights of the property owners within the shopping Center to park on each other's lots. The Board finds that the historical use of the parking lot by all of the patrons of all of the uses within the Center is common and has existed for perhaps as long as fifty to sixty years. . . .

The Board finds that it would be appropriate to observe the experience with the proposed uses prior to the implementation of any additional parking spaces, in view of the historically open nature of parking at the Theatre Center and the ability of the public to consistently find sufficient parking in the existing parking lots. The Board further finds that the proposed mixture of uses on lot 21 will work well with the shared parking nature of the existing Theatre Center, as well as the shared parking goals and objectives of the Municipal Master Plan and Town Center Plan and ordinances.

After the Board adopted the resolution granting the site plan application, Nouvelle met with Levin to discuss his concerns about patrons of the redeveloped Sparta Theatre complex parking on Levin's property. In an attempt to allay Levin's concerns, Nouvelle modified the internal design of the proposed new Sparta Theatre complex by repositioning the main entrance to the theater and Panera Bread to the front of the building, on the other side from Levin's property. This would discourage theater patrons from parking in Levin's spaces. To make these modifications possible, Nouvelle shifted the building's position on the lot.

These changes slightly altered the site's required parking under the Sparta ordinance. Specifically, the number of required spaces increased from 170 to 175. Thus, in an amended application before the Planning Board, Nouvelle proposed a reconfiguration of the existing eighty parking spots to create eighty-nine spaces.

The Planning Board held a special meeting on July 13, 2006 to consider Nouvelle's amended application. Nouvelle called its planner Kenneth B. Dykstra, who gave the following testimony:

Q: So, with respect to those variances, you were here at the last hearing, you heard all the testimony with respect to the shared parking and the historical nature of parking on this site and the common parking scheme, right?

A: Yes.

Q: As a planner, do you believe that that stills holds true today?

A: Yes.

Q: And in your opinion, you believe there's sufficient parking on-site, with the shared parking arrangement and with the variety of uses and the different hours, to accommodate that slight increase in parking [from 170 required spaces to 175]?

A: Yes.

The Planning Board voted unanimously to approve Nouvelle's application for amended preliminary and final site plan approval with ancillary "c" variances. The Board memorialized its decision in a resolution dated August 2, 2006. With respect to the parking variance, the resolution provides that:

2. [Nouvelle's planner,] Mr. Dykstra explained the changes to the Board, he explained the site plan and described it to the Board. Mr. Dykstra confirmed that the Applicant could revise the plans to provide for a shift of the handicapped parking spaces from the front of the building to the existing Center Street parking lot but this would result in the loss of three parking spaces so that the total re-striped parking in the Center Street parking lot would be 86 spaces instead of the proposed 89 as set forth on the plans. The Board finds that this change of the handicapped parking spaces will allow for improved circulation in front of the Panera Bread and Theatre building and will improve the circulation for larger trucks entering from Center Street driveway . . . .

. . . The applicant wishes to confirm the prior parking variance in order to allow for the relocation of the handicapped parking spaces from the front of the building as recommended by the Board. The Applicant is requesting a variance to permit 86 parking spaces to serve, where 175 parking spaces are required. The Board finds that this relief from the ordinance standards will benefit the purposes of zoning by providing for the appropriate mixed use in the Town Center Commercial District as envisioned by the Master Plan and ordinances of the Township of Sparta.

The Board placed several conditions on its approval of Nouvelle's amended application, including the following parking restrictions:

5. The Applicant shall relocate the two handicapped spaces in front of the building to the right side of the Center Street parking lot and shall re-stripe the parking lot to obtain a total of 86 parking spaces where 89 were originally proposed and where 79 currently exist.

6. The Applicant shall notify the tenants that they should instruct their employees to park in parking spaces away from the Levin parking lot spaces.

II.

On July 21, 2006, plaintiff filed the first of two actions in lieu of prerogative writs, challenging the Planning Board's grant of the initial preliminary and final site plan application (Docket No. SSX-L-401-06). The second action, challenging the Planning Board's grant of amended preliminary and final site plan approval and the ancillary "c" variances, was filed on September 15, 2006 (Docket No. SSX-L-521-06).

After consolidating the two actions in lieu of prerogative writs, the trial court issued an order on January 26, 2007, granting plaintiff application for a temporary injunction. In that order, however, the trial court made clear that: "Defendants have rights in common with others for the use and occupancy of the common areas for ingress, egress, free flow of traffic and parking with respect to the various lots and blocks that make up the shopping center including the Levin property . . . ."

The consolidated cases came to trial on February 21, 2007. The court framed the issues thusly:

The plaintiff here really poses three arguments before the Court. First, that the board had no authority over the rights of Levin. It was not a party to this matter. And that there shouldn't have been any approval of parking variances that, that involved Levin's parking rights. Second, that the deed into Levin properties from the common grantor and to other landowners in this line of shopping center area showed that there should be no right to park on the Levin, on the Levin property under these recorded deed instruments. And that there were no common parking rights to the Levin property from the common grantor, the St. Cloud Building Corporation.

And third, that the variances here should be set aside on the basis of the fact that they're arbitrary and capricious and unsupported by credible evidence in that regard.

On the variance grants the plaintiff's contention is that the Planning Board relief, which relied in part on the testimony and parking study of Gordon Meth, a professional engineer here of the defendant, was that Meth only addressed the totality of the parking spaces on different properties contained in the parking study in that regard. And that there wasn't testimony received regarding the variance itself. That is to permit 86 parking spaces where 175 were required. And that Meth was really relying on the fact that there was an overall shopping area parking spaces here of 373 spaces. And assuming that those were all available and that he wasn't focusing on the particular property itself in that regard.

You have to look at where does it sit. And it sits in this town center zone, sits in the middle of a shopping area. It is unique in that regard. It's in a mixed use area in that respect. So that reduced parking standards can be considered when you're talking about a shopping mall area that has existing 373 spots in it. And what was the history of how this transpired over some 50 years in that regard.

The court then addressed the legal implication of the Board's grant of Nouvelle's site plan application:

So what the board was basically deciding, it is as its resolution showed, is that there's 86 spots available here for the theater, but the theater sits in a shopping mall area with many, many parking spaces. And that it has 86 spots, and we are granting the variance based on 86 spots. We don't think 175 spots is necessary because this is in a reduced parking standard area, a town center area. It's not necessary that it be done. It's been there for over 50 years in the ever expanding, developing shopping mall, and it's not necessary.

It wasn't deciding any property rights of plaintiff or others. It was simply recognizing that this is the area that it's in. And what it was basically saying is 86 spots is enough in this area instead of the 175. And in addition, we recognize where it sits, and we recognize it sits in the middle of a parking mall area in that regard.

So that when we're looking at a C-2 variance in terms of State v Kaufman (phonetic), our Supreme Court decision, and we're focusing on whether this is a better zoning alternative for this property. And in terms of satisfying the negative criteria and the benefits outweigh the detriments, we have all of that evidence that the board could rely on, which I've just outlined and summarized, a unique piece of property sitting in the middle of a shopping area surrounded by parking spaces and ingress and egress pavement area, surrounded by entrance to the parking center area, which provides 86 spaces, which has a grassy area that could provide an additional 40 spaces if necessary, and the resolution recognizes that.

And the board determined that 86 spaces was enough under those circumstances and that the negative criteria is satisfied because there is not a substantial detriment to the surrounding area.

The trial court then addressed the argument advanced by Levin that, under the expressed language in its deed, Levin had the right to prevent other members of the shopping center from using its parking spaces, while preserving Levin's right to use the remaining parking spaces in the center. After reviewing the language in the 1957 Levin deed and the 1960 deeds to Sussex Lanes, the court framed the issue as follows: "In other words, [Levin] wants all the benefits without any of the burdens of a restricted [sic] covenant."

In an attempt at answering this question, the court compared a restrictive covenant "dealing with a common plan" to a neighborhood scheme. Relying on Weinstein v. Swartz, 3 N.J. 80 (1949), the court rejected Levin's argument because, with the benefit conferred by the restrictive covenant, comes the burden imposed by the neighborhood scheme. Stated differently, the court held that Levin could not exclude other businesses in the shopping center from using its parking spaces. The court explained its ruling as follows:

The grantor, the common grantor was developing this common scheme or plan when he was laying out all the deeds.

For Levin Properties to say it will accept all the benefits that are given for this shopping mall, that is, I can park anywhere - my, my tenants, my customers can park anywhere they want. But since I have further language in my deed on restrictions, that no one else can park on my property, is contrary to that thinking of our Supreme Court [in Weinstein] and our law in this regard, and that is that the burdens follow the benefits when you have a common scheme.

Now I don't know what the property looked like in 1957 when the grantor, St. Cloud's, gave that kind of language to Levin Properties. But we do know what's happened to this property over 50 to 60 years. And that is that it has continued to develop as a shopping area mall with multiple commercial stores with the Sparta theater sitting in the middle of the parking area. There are no barriers because there can be no barriers. All of the deeds contemplated that traffic was going to be going back and forth.

So for a plaintiff such as Levin to say I am a commercial property owner where I have developed my property for commercial stores . . . [a]nd I receive the benefits of this because these are my tenants. They're coming in here to park at the, at the Sparta Theater Mall. And my neighbors are like property owners. My neighbors are property owners that have other stores where people come in. And the Sparta theater, which has been there for over 50 years, where people come in to utilize the Sparta theater, and now we utilize the Panera Bread and Rita's ice cream.

But even though I'm receiving those benefits of all these people coming into the mall, and my tenants and my customers can park anywhere they want, I'm not going to allow any of the other customers coming in of the other store owners, Sparta theater, to park on my particular lot, makes little sense in 2007 for a deed that was created in 1957. At a minimum there are implied, implied easement grants in that regard for common property.

So for all of those reasons the Court affirms the decision of the Planning Board in this regard, and determines that there are common parking rights with all customers here that enter this particular Sparta Theater Center shopping center mall area in that regard.

Thereafter, the trial court entered an order that declared that Nouvelle and Centre Street Properties have rights in common with others for the use and occupancy of the common areas of the shopping center "for ingress, egress, free flow of traffic and parking with respect to the various lots and blocks that make up the shopping center community." This "community" included the Levin property.

The order dismissed plaintiff's prerogative writs action, Docket No. SSX-L-401-06, with prejudice in its entirety. With respect to plaintiff's second prerogative writs action, Docket No. SSX-L-521-06, the trial court dismissed with prejudice all counts except Count 4, dealing with damages to Levin's property resulting from excavation at the Sparta Theatre site. On October 12, 2007, the trial court entered a consent order dismissing the damages claim with prejudice.

III.

Plaintiff Levin argues that the trial court erroneously applied the law of restrictive covenants, and not of easements, when it found that a "common scheme" existed, granting Centre Street Properties a right to park on its property. According to Levin, under the law of implied easements, Centre Street Properties has no right to park on its property. Nouvelle and Centre Street Properties argue that the trial court properly relied on case law dealing with restrictive covenants in finding a "common scheme," granting Nouvelle the right to park on Levin's property. The Planning Board does not address this issue in its brief.

We begin our analysis of this issue by reviewing the cases relied on by the trial court. These are: Weinstein v. Swartz, 3 N.J. 80 (1949); Auerbacher v. Smith, 22 N.J. Super. 568 (App. Div. 1952), certif. denied, 11 N.J. 498 (1953); and Scull v. Eilenberg, 94 N.J. EQ: 759 (E. & A. 1923).

In Weinstein, supra, the property in question was one of sixteen lots owned by an original common grantor named Parker. 3 N.J. at 83-84. Parker sold two of the lots in 1905 and another two in 1911. Id. at 84. None of these four lots were conveyed subject to any restrictions. Ibid. The two unrestricted lots from the 1911 sale were not contiguous to the fourteen other Parker lots, being separated from the rest by a 52-foot-wide strip of land owned by a another party. Ibid. Parker sold the fifth of the sixteen lots in 1910 to the First Presbyterian Church. Id. at 84-85. The church lot was not subject to use restrictions, but was subject to setbacks and other bulk requirements. Ibid.

Parker sold the remaining eleven lots between 1906 and 1911, all of which were subject to a restrictive covenant limiting the property's use to single-family residential purposes, such restriction to run with the land. Id. at 84. Plaintiff Weinstein purchased one of these eleven use-restricted lots in 1947. Id. at 83. He brought suit to remove from his property the single-family residential restriction. Id. at 85.

The trial court dismissed Weinstein's complaint, finding "that a neighborhood scheme of development had been established by the Parker conveyances; that the character of the neighborhood ha[d] not been changed, and that the restrictions imposed by the Parker deeds [were] still in existence and [were] valid and binding." Ibid. The Supreme Court affirmed. Id. at 90.

Affirming that decision, the Court acknowledged that not all sixteen of the original Parker lots were bound by the single-family residential restriction. Id. at 85. Writing for a unanimous Court, Justice Ackerson nevertheless found that:

The absence of restrictive covenants by the common grantor in some of the properties conveyed by him may be evidence of an intent not to create a neighborhood plan but this evidence is not conclusive. . . . [W]hether such a plan has been established "is a question of fact to be answered not only by the wording of the deeds but by the surrounding circumstances and the acts of the parties."

A restrictive covenant is a contract. Any neighborhood scheme that flows from the terms thereof must to be effective and enforceable apply to all lots of a like character brought within the scheme. The consideration to each lot owner for the imposition of the restriction is that the same restrictions are placed upon the lots of others similarly located. Its universal character therefore is dependent upon reciprocal or mutual burdens and benefits shared by each lot owner brought within the orbit of the common neighborhood plan.

Complete uniformity of restrictions is not required, they may vary in different sections of a tract in accordance with the design of the original grantor. Thus one section may be set aside for stores, another for a railroad station or hotel, and another for private dwellings. It suffices if all the deeds for the lots making up any particular neighborhood group are made subject to uniform covenants in order that the benefits and burdens of the lots encompassed by the general scheme are subject to mutual burdens and benefits.

[Id. at 86 (citations omitted).]

The reasoning in Weinstein is not entirely applicable here, because the issue addressed by the Court in Weinstein involved a use restriction, and not the requirement to allow another to park on or otherwise use one's property. Id. at 83. We next address Auerbacher v. Smith, supra. In Auerbacher, the defendants' property was part of a large parcel that was sold in one piece in 1893. 22 N.J. Super. at 570. That bulk sale contained a restriction that use of the property be exclusively limited to private dwellings. Id. at 570-71.

Thereafter, the property was subdivided and sold without reference to the initial use restriction. Id. at 571.

After a few mesne conveyances, the plaintiff purchased her lot in 1934, expressly subject to the initial use restriction. Ibid. The defendants obtained their lot in 1949, free of the expressed restrictions, but "subject to existing restrictions of record, and such facts as an accurate survey will reveal." Id. at 572. The defendant husband attempted to operate his medical practice from the house on his lot; the plaintiff brought suit to enjoin such use of the defendants' property, in light of the residential-only restrictions reflected in her deed. Id. at 572.

In addressing the doctrine of a "neighborhood scheme," we noted that:

Plaintiff does not rely upon the existence of a neighborhood scheme, nor could she. . . . Such a scheme, to be effective and enforceable, must have certain characteristics. It must be universal, the restrictions applying to all lots of like character brought within the scheme. It must be reciprocal, the restrictions constituting a benefit to all lots involved which are subject to the burden imposed. It must be reasonably uniform as to the restrictions imposed; they need not be identical, but any variations must be such as not to create an inequitable burden or benefit. Weinstein v. Swartz, 3 N.J. 80, 86 (1949); Scull v. Eilenberg, 94 N.J. EQ. 759 (E. & A. 1923).

[Id. at 572-73.]

Here, Levin argues that the trial court erroneously applied the law of restrictive covenants, relying on Weinstein and Auerbacher, supra. According to Levin, if defendants have a right to park on its property, that right must be found using the law of easements. In response, Nouvelle and Centre Street Properties emphasize that Levin's deed contains a covenant not to interfere with the operation of the Sparta Theatre. Thus, Nouvelle argues that Levin must allow it to park on its property as part of the general covenant not to interfere with the operation of the Sparta Theatre.

Although the question of which body of law best addresses and resolves this conflict has an intellectual appeal, we conclude that Levin's position here is without merit regardless of the approach taken. To paraphrase an ancient proverb, all roads lead here to the same result.

Black's Law Dictionary defines "covenant" as:

A promise made in a deed or implied by law; esp., an obligation in a deed burdening or favoring a landowner.

"In their nature, covenants are first cousins to easements appurtenant. The burdened land corresponds to a servient tenement, the benefited land, to a dominant tenement. In concept, the main difference between easements and covenants is that, whereas an easement allows its holder to go upon and to do something upon the servient tenement, the beneficiary of a covenant may not enter the burdened land, but may require the owner of that land to do, or more likely not to do, something on that land." Roger A. Cunningham et al., The Law of Property § 8.13, at 467 (2d ed. 1993).

[Black's Law Dictionary 370 (7th ed. 1999) (emphasis added).]

This distinction is followed in New Jersey. Leasehold Estates, Inc. v. Fulboro Holding, Co., 47 ("An easement of way is essentially and inherently a legal interest in land . . . as distinguished from a restriction resulting from a restrictive covenant, which is but a creature of equity arising out of contract.") N.J. Super. 534, 551 (App. Div. 1957), certif. granted, 25 N.J. 538 (1958); see also Amer. Metal Co. v. Fluid Chem. Co., 121 N.J. Super. 177, 182 (Law Div. 1972) (citing Leasehold Estates, supra, 47 N.J. Super. 534).

Here, the trial court found that a neighborhood scheme endowed defendants with the right to park on Levin's property. The right to park has been discussed and addressed under the law of easements. See, e.g., Mahony v. Danis, 95 N.J. 50, 51 (1983); Pullen v. Twp. of S. Plainfield Planning Bd., 291 N.J. Super. 1, 5 (App. Div. 1996); PNC Bank v. Axelsson, 373 N.J. Super. 186, 189 (Ch. Div. 2004); Alexander's Dep't Stores, Inc. v. Arnold Constable Corp., 105 N.J. Super. 14, 20-21 (Ch. Div. 1969).

The Third Restatement on Property treats both easements and covenants as equally validly created by a "common scheme" or "general plan." See Restatement (Third) of Property: Servitudes §§ 1.1(2), 2.14 comment f (2000); see also Slear v. Hanna, 496 S.E.2d 633 (S.C. 1998) (finding that a common scheme provided an access easement to inter-coastal waterway in all owners within a subdivision).

Relevant to the facts here, the Restatement provides that:

The existence of a general plan may be inferred from the inclusion of similar restrictions in the deeds from a common grantor, even when the restrictions were omitted from a few of the original deeds. The inference is strengthened by the fact that all the original buildings in the tract, including those on apparently unrestricted lots, conformed to the restrictions included in most of the deeds. The inference of a general plan from these facts, without any evidence of other representations by the common grantor, is probably justified when the question is whether the neighbors can enforce restrictions against the lots whose deeds did include a restriction, but would only rarely be justified when the neighbors seek to enforce restrictions against the owner of a lot whose original deed did not include a restriction.

[Restatement (Third) of Property, supra, § 2.14 comment f.]

Here, at least four separate deeds conveying property from the common grantor, (and prior to Levin's purchase of Lots 22 and 23), contained language reserving a reciprocal parking easement: that each owner's customers could park anywhere within the common parking area. Similarly, the two deeds conveying Lots 19 and 20 to Sussex Lanes, (executed three years after the sale to Levin), contain similar language creating a parking easement over the Sussex Lanes lots for common use by other "Sparta Center" property owners.

Levin relies heavily on the sixth paragraph of its deed, which provides that:

6. [Levin] herein expressly agrees to keep the entire second course (a line 180.42 feet in length) free and open to all times, and agrees not to erect a fence, barrier or other obstruction along the same. The Grantor herein hereby also covenants and agrees that it, in turn, will not construct, erect or maintain any fence, barrier or other obstruction along its side of the said boundary line.

The purpose of this covenant is to keep the said boundary line open to permit the free flow of traffic between the above described lands and remaining lands of Grantor. It is distinctly understood, however, that this restriction is not intended, nor shall the same be construed, as a reservation by the Grantor of any right to park its vehicles or the vehicles of its successors, assigns, tenants, customers, agents or invitees, o[n] any part of the above described lands. (Emphasis added).

Thus, Levin argues that its deed expressly forbids the parking easement over its property. This argument is predicated on the assumption that the term "above described lands" refers to Levin's property. Nouvelle and Centre Street Properties argue that the term "above described lands" refers to the "second course" only: that is, only the border region between Lots 2 and 22.

Although this point cannot be decisively settled on this record, we will accept, arguendo, that the phrase "above described lands" refers to the entirety of Levin's Lot 22. Other provisions of Levin's deed, however, contemplate Levin's participation in the general shared parking plan. Levin's deed expressly grants Levin a parking easement over the Sparta Center parking areas. Through this easement, Levin was granted the benefits of the common parking scheme created in the four prior and two subsequent conveyances. Levin's deed also contains a requirement that Levin contribute to maintenance of the common parking areas. When the easements reserved in the other St. Cloud deeds are read in pari materia with the provisions in Levin's deed, there is sufficient evidence to support the trial court's finding that a "common scheme" exists, creating a shared shopping center parking arrangement. See Weinstein, supra, 3 N.J. at 90.

When reviewing the decision of a trial court that has reviewed a planning board's action, we apply the same standard of review that governed at the trial level. N.Y. SMSA, L.P. v. Bd. of Adjustment of Weehawken, 370 N.J. Super. 319, 331 (App. Div. 2004) (citing Charlie Brown of Chatham, Inc. v. Bd. of Adjustment of Chatham, 202 N.J. Super. 312, 321 (App. Div. 1985)). Thus, we owe substantial deference to a planning board's factual finding. Jock v. Zoning Bd. of Adjustment of Wall, 184 N.J. 562, 597 (2005). The Board's discretionary decisions should not be overturned unless arbitrary, capricious and unreasonable. Ibid.

Among the issues raised by Levin attacking the Planning Board's actions here, Levin argues that the variance, as detailed in the August 2, 2006 resolution, differs from the evidence presented before the Board. Thus, according to Levin, the evidence does not support the variance as granted, and the action taken must be overturned. See Meszaros v. Planning Bd. of S. Amboy, 371 N.J. Super. 134, 138 (App. Div. 2004)).*fn3

Nouvelle Associates, Centre Street Properties and the Planning Board argue that the evidence before the Board amply supported the parking variance.

In the comment to R. 4:69, "Actions in Lieu of Prerogative Writs," Judge Pressler describes the presumption of validity attached to municipal bodies' actions, and the arbitrary, capricious and unreasonable review standard. Pressler, Current N.J. Court Rules, comment 5.2 on R. 4:69 (2008). The comment notes "[t]he importance for an agency to properly memorialize its findings" and states that "if the record of the proceedings before the local agency varies from the resolution memorializing the local agency's action, the record may be given controlling effect." Ibid. (citing Meszaros, supra, 371 N.J. Super. at 138; Park Ctr. at Route 35, Inc. v. Zoning Bd. of Adjustment of Woodbridge, 365 N.J. Super. 284, 289 (App. Div. 2004); Fieramosca v. Twp. of Barnegat, 335 N.J. Super. 526, 533-34 (Law Div. 2000)).

In Fieramosca, the planning board approved the plaintiff's application for site plan approval, subject to a number of conditions. 335 N.J. Super. at 528. One of these conditions directed the plaintiff to install a drainage pipe at a certain location on the property. Id. at 529. Though discussed at the hearings and appearing in the transcripts of those proceedings, the drainage pipe condition did not expressly appear in the board's resolution memorializing the approval. Ibid. The plaintiff challenged the propriety of this condition in a prerogative writs action. Id. at 530.

The Law Division noted that discussion of the drainage pipe appeared throughout the record and that "[a]t several places in the transcript there is unequivocal evidence that the applicants understood they were being called upon to install a pipe." Id. at 531. The Law Division further observed that, "[i]n fact, our Appellate Division has noted that while a resolution is evidential of what was considered at the hearing, it is not determinative." Id. at 534 (citing Sherman v. Harvey Cedars Zoning Bd. of Adjustment, 242 N.J. Super. 421, 430 (App. Div.), certif. denied, 122 N.J. 404 (1990)). Thus, the Law Division held that the failure to include an otherwise valid condition in the memorializing resolution would not invalidate that condition, if the condition appeared in the board record. Id. at 534-35.

We addressed the same issue four years later. In Park Center, supra, the plaintiff received minor site plan approval for the construction of a strip mall. 365 N.J. Super. at 88. The plaintiff's plan involved two "phases." Id. at 287. Phase I was the construction of the 10,000 square foot strip mall and parking lot. Ibid. Phase II was the demolition of a pre- existing "sweet shop" on the property, to provide space for additional parking. Ibid. Before the board, the plaintiff stated that Phase II would begin when the sweet shop's current lease ran its course. Id. at 287-88. The board's resolution did not give a required time frame for the completion of Phase II, nor did it describe Phase II as being a condition of approval of Phase I. Id. at 288.

When the sweet shop operator chose not to renew his lease, the plaintiff obtained a new tenant for the sweet shop structure, instead of beginning Phase II. Ibid. When confronted by the zoning office as being in violation of its site plan, the plaintiff sought an amended minor site plan approval so as to rid its application of the Phase II condition. Ibid. The board denied this application and the plaintiff appealed to the Superior Court. Ibid.

We upheld the planning board's determination that prompt completion of Phase II was a valid condition of the plaintiff's Phase I minor site plan approval. Id. at 289. Speaking for the panel, Judge Fisher noted:

In the matter at hand, the Board acted reasonably in both recognizing that it had conditioned approval upon the completion of Phase II and in refusing to amend its prior approval when Park Center sought to avoid its obligation to perform Phase II. The record created in the proceedings before the Board compels the conclusion that the approval of the initial application was conditioned upon the later completion of Phase II. In so holding, we recognize that while the memorializing resolution itself does not state this requirement as a condition, that fact alone is not determinative. As Judge Serpentelli correctly observed in Fieramosca, "the adoption of the memorializing resolution is not the 'decision' but merely a memorialization of that decision." Fieramosca, supra, 335 N.J. Super. at 533. Fieramosca correctly applied Sherman v. Harvey Cedars Bd. of Adj., 242 N.J. Super. 421, 430, (App. Div. 1990), where it was held that "[w]hile the resolution of the Board is certainly evidential on that issue, it is not determinative. The record is the best evidence of what the Board considered and decided." See also Allied Realty v. Upper Saddle River, 221 N.J. Super. 407, 415, (App. Div. 1987), certif. denied, 110 N.J. 304, (1988); Orloski v. Bor. of Ship Bottom, 226 N.J. Super. 666, 678-79, (Law Div. 1988), aff'd o.b., 234 N.J. Super. 1, (App. Div. 1989). Accordingly, we agree with Judge Serpentelli's analysis in Fieramosca that the entire record before the local board must be considered to determine what was decided and whether a condition was imposed, notwithstanding the failure to include that condition in the memorializing resolution.

[Id. at 289.]

Here, the Planning Board's August 2, 2006 resolution granting Nouvelle amended site plan approval adopted the Board's June 7, 2006 resolution by reference. In the June 7 resolution, the Board described the shopping center situation and found that:

the historical use of the parking lot by all of the patrons of all of the uses within the Center is common and has existed for perhaps as long as fifty to sixty years. . . . The Board finds that it would be appropriate to observe the experience with the proposed uses prior to the implementation of any additional parking spaces, in view of the historically open nature of parking at the Theatre Center and the ability of the public to consistently find sufficient parking in the existing parking lots. The Board further finds that the proposed mixture of uses on lot 21 will work well with the shared parking nature of the existing Theatre Center, as well as the shared parking goals and objectives of the Municipal Master Plan and Town Center Plan and ordinances.

At the hearings, the Planning Board heard expert testimony as to the historically shared parking scheme and complimentary uses at the shopping center. The Board also considered the parking study conducted by Gordon Meth, who also testified extensively about the parking needs at the shopping center. He ultimately opined that the variance requested could be granted without causing parking problems.

The record thus supports that the Planning Board viewed the application as a part of the entire existing shopping center, and not just the parking affecting the Centre Street's property in isolation. We are satisfied that the evidence in the record amply supports the Board's grant of the parking variance.

Affirmed.


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