On appeal from the Superior Court of New Jersey, Chancery Division, Cape May County, C-46-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Winkelstein, Gilroy and Chambers.
Defendants LMW Properties and Gold Coast Properties appeal, and plaintiff cross-appeals, from a May 10, 2007, final judgment entered following a bench trial. The trial focused on the enforceability of two provisions of an assignment of an agreement of sale. Plaintiff was acquiring the property to construct an addition to an existing home on an adjacent lot. The first provision at issue stated that the addition would be limited to a garage with a master bedroom located above it. Defendant challenges the trial court's finding that this provision was unenforceable. Plaintiff cross-appeals from that portion of the judgment that found enforceable the provision in the assignment restricting the location of plaintiff's construction to a minimum of thirty-five feet from the bulkhead. We reject both parties' arguments and affirm.
In August 1999, Eustace Mita and his wife, Susanne Mita, owned beach-front property located at 2815 Wesley Avenue in Ocean City (Lot 4). They were the general partners of ATIM Family Partnership (ATIM), which owned property to the north of Lot 4, known as 2805 Wesley Avenue (Lot 2). Lot 4 contained the Mitas' summer home; Lot 2 consisted of a five-unit condominium.
Separating Lots 2 and 4 was a vacant parcel, 2809 Wesley Avenue, (Lot 3), owned by Robert H. Shaner III and his wife Eileen Shaner (Shaner).*fn1 In September 1999, the Shaners entered into an agreement with LMW Properties, owned and operated by Steven Winters, for the sale of Lot 3. LMW intended to construct a duplex on Lot 3.
Mita wanted to purchase Lot 3 so he could own contiguous lots. He asked Shaner to "back out of the deal with Winters and sell it to him." Shaner refused, indicating that he already had a contract with LMW. Mita subsequently contacted Winters and proposed that they exchange properties; Mita wanted ATIM to acquire Lot 3 in exchange for conveying Lot 2 to LMW.
During discussions regarding the exchange, Mita told Winters that he "wanted to put an addition on his existing home that consisted of a garage with a master bedroom above." Winters was concerned about what would be built on Lot 3, should he agree to the exchange, because he wanted to preserve the views from his proposed development on Lot 2. He agreed to Mita's proposed use, but suggested that any development on Lot 3 be setback thirty-five feet from the bulkhead in order to preserve the views from Lot 2. Mita did not recall having any discussions with Winters regarding the intended use of Lot 3 or the restrictions to be placed on the improvements to the property.
LMW, ATIM and Mita, as an ATIM general partner, entered in to an Assignment of Agreement of Sale (the assignment), assigning to ATIM and Mita LMW's rights and interests in the agreement of sale for Lot 3. ATIM executed a single purpose power of attorney, authorizing ATIM's attorney, John York, to represent ATIM at the closing for Lot 3 and to execute all necessary documents, including "assignments," which York testified referred to the assignment at issue, and "other assignments that may be needed." Both Mitas signed the power of attorney as the sole general partners of ATIM.
The assignment reflected Winters's understanding of the development restrictions to be placed on Lot 3 that he had discussed with Mita. Those restrictions, paragraphs 5 and 6 of the assignment, specifically provided:
5. ASSIGNEE represents that he is acquiring [Lot 3] for purposes of constructing a garage addition to his existing home, which garage shall have living space above. However, the use of this [Lot 3] is to service his existing home, located next door to this lot.
6. ASSIGNEE agrees that whatever improvements he makes to [Lot 3], which is the subject of this Assignment, shall be set back a minimum of thirty-five (35) feet from the bulkhead.
Paragraph 9 stated that "The provisions of this Assignment shall survive settlement." Nonetheless, Winters asked Mita to place deed restrictions on Lot 3 consistent with the provisions of the ...