July 27, 2009
CHARLES WEIDEL AND ADRIANNA WEIDEL, PLAINTIFFS-APPELLANTS,
PLANNING BOARD OF THE TOWNSHIP OF WALL, DEFENDANT, AND SUNNYSIDE MANOR, INC., DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-174-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 4, 2009
Before Judges Lisa and Sapp-Peterson.
Plaintiffs, Charles and Adrianna Weidel, appeal from the May 12, 2008 Law Division order dismissing their complaint in lieu of prerogative writs for lack of subject matter jurisdiction. We affirm.
Plaintiffs reside in the Township of Wall (Township), where defendant, Sunnyside Manor, Inc. (Sunnyside), plans to erect a healthcare facility at 2500 Ridgewood Road (the property). Sunnyside is also the owner and operator of a healthcare facility on Ramshorn Drive in the Township. The facility on Ramshorn Drive consists of nursing home and assisted living units. In March of 1998, Sunnyside filed a land use application with the Township's Board of Adjustment (Board). The application sought use and bulk variance approval to expand Sunnyside's existing facility on Ramshorn Drive. After multiple hearings, the Board denied Sunnyside's application.
In June of 2002, Sunnyside filed an action, which was later amended on May 9, 2005, in the United States District Court for the District of New Jersey against the Township and the Board, alleging that the Board's denial of Sunnyside's application violated the Fair Housing Act, 42 U.S.C.A. §§ 3601 to 3631, and the Americans with Disabilities Act, 42 U.S.C.A. §§ 12101 to 12213.
The parties negotiated a settlement which was memorialized in a consent order signed by the court on November 17, 2006. The relevant portion of the judgment provided that: (1) Sunnyside had the right to purchase property located on Ridgewood Road owned by Elaine Stevens; (2) the Township agreed to enact a Mount Laurel Congregate Care ordinance similar to a township ordinance that addressed such issues as setbacks, density, impervious coverage and height; (3) the proposed new facility was declared to be "inherently beneficial," thereby negating the issuance of any variances; (4) Sunnyside had the right to prepare and file its site plan application for approval and the Township was required to "hear and approve Sunnyside's application within thirty (30) days"; and (5) as long as defendant purchased Elaine Stevens' property, Sunnyside had the right to file an application for subdivision approval of the existing Sunnyside property.
More specifically, the order provided that Sunnyside would make two separate applications to the Township's planning board. The first application would seek subdivision approval to create eight residential lots on Sunnyside's property located on Ramshorn Drive, and the second application would seek site plan approval to construct a new health care facility with nursing home and assisted living units on the 2500 Ridgewood Road site.
The consent order provided that the Township's planning board should hear and approve Sunnyside's applications within thirty days after the date the application is deemed complete. The order also expressly provided that the district court would retain jurisdiction to enforce its terms.
At the time Sunnyside and the Township reached their agreement, Sunnyside had not yet become the record owner of title to the property. Under the consent order, however, Sunnyside had the right to purchase the property from its then owner, Elaine Stevens, or the Township, if the Township purchased the property from Stevens. Stevens conveyed title to the property to the Township in July 2007. Stevens was represented in the transaction by counsel, who is the attorney of record for plaintiffs in this appeal.
Also in July 2007, Sunnyside submitted an application for preliminary and final site plan approval with variances to relocate what is known as Sunnyside Nursing Home to the property. The planning board conducted a public hearing on the application on October 22, 2007, at which time plaintiffs appeared and objected to Sunnyside's application. The planning board granted Sunnyside's application in a resolution dated December 3, 2007.
On January 9, 2008, plaintiffs filed a complaint in lieu of prerogative writs in the Law Division seeking an order setting aside the planning board's resolution granting Sunnyside's application. The complaint named the planning board and Sunnyside as defendants.*fn1 It did not, however, name the Township and Board, who were the parties in Sunnyside's federal action. Thereafter, Sunnyside filed a motion seeking the dismissal of plaintiffs' complaint for lack of subject matter jurisdiction pursuant to Rule 4:6-2(a), which the Law Division judge granted. The present appeal followed.
On appeal, plaintiffs essentially argue (1) the court committed reversible error when it concluded that it lacked subject matter jurisdiction; (2) Sunnyside failed to meet its burden to establish "that the federal court has jurisdiction to hear [plaintiffs'] application and the trial court misapplied the law"; (3) under New Jersey law and the doctrine of special equities, plaintiffs' complaint must be heard in the Law Division; and (4) the trial court made no findings of fact and conclusions of law that warrant dismissal of the complaint on grounds of comity. We are not persuaded by any of plaintiffs' arguments and affirm substantially for the reasons expressed in Judge Lawson's cogent and well-reasoned May 12, 2008 written opinion. We add the following brief comments.
In Gilbert v. Gladden, the Court stated that the issue of subject matter jurisdiction "involves merely a threshold determination as to whether the Court is legally authorized to decide the question presented." 87 N.J. 275, 280-81. The Court reasoned that if the answer to this question is in the negative, consideration of the cause is "wholly and immediately foreclosed." Ibid. (citing Baker v Carr, 369 U.S. 186, 198, 82 S.Ct. 691, 699, 7 L.Ed. 2d 663, 674 (1962)). Here, resolution of the threshold question involves an interpretation of the settlement agreement between Sunnyside and the Township that was incorporated into an order by the federal district court. Although the agreement was incorporated in a court order, its interpretation is governed by contract principles. New Jersey Mfrs. v. O'Connell, 300 N.J. Super. 1, 7 (App. Div.), certif. denied, 151 N.J. 75 (1997).
In that regard, where the terms of a contract are clear and unambiguous, its terms will be enforced in accordance with its terms. Ibid. (stating that general principles of contract law apply to settlements). Here, the settlement of the federal action instituted by Sunnyside against the Township and the Board did not simply result in the dismissal of Sunnyside's complaint. Rather, the dismissal included a consent order that incorporated the terms of the settlement into the order and expressly reserved to the federal district court the continuing jurisdiction to enforce the settlement: "This Court shall retain continuing jurisdiction to enforce the terms of this Order. In the event that any party does not comply with the terms of this Order, the aggrieved party may apply to this Court for an Order enforcing the terms of this settlement and the Consent Order."
The United States Supreme Court indicated in Kokkonen v. Guardian Life Ins. Co. of Am. that it is appropriate for a federal court to validly exercise jurisdiction when there is a post-settlement controversy to "protect its proceedings and vindicate its authority" provided the order contains the terms of the parties' settlement or contains a provision "retaining jurisdiction" over the settlement agreement. 511 U.S. 375, 380-81, 114 S.Ct. 1673, 1676-77, 128 L.Ed. 2d 391, 397 (1994). "[A]bsent" a clear retention of jurisdiction in this setting, "enforcement of the settlement agreement is for state courts." Id. at 382, 114 S.Ct. at 1677, 128 L.Ed. 2d at 398.
Likewise, in Thompson v. City of Atlantic City (II), our Court reiterated that where the terms of a settlement agreement have been incorporated into the dismissal order issued by a federal court, that court retains jurisdiction over the action when it has specifically retained jurisdiction by incorporating the terms of a settlement agreement in a dismissal order. 190 N.J. 359, 379 (2007) (citing Kokkonen, supra, 511 U.S. at 378-82, 114 S.Ct. at 1675-77, 128 L.Ed. 2d at 395-98 (1994) (noting that action to enforce settlement agreement is typically state breach of contract action)).
In Thompson, the Office of Government Integrity (OGI) commenced an action in state court to set aside a settlement reached in a federal action on the basis that the settlement was fraught with conflicts of interests involving the parties to the settlement agreement. Id. at 363. The trial court agreed that the settlement was rife with conflicts of interest but reasoned that to grant the relief OGI sought "would be tantamount" to the state court vacating a federal court order, and therefore held that it did not have the power to "'invade the jurisdiction of the federal court by vacating a settlement which resulted in the dismissal of the federal litigation pursuant to an order entered by the United States District Court.'" Id. at 370.
On appeal, we agreed that there were "inherent and actual" conflicts that rendered the settlement agreement untenable. Thompson v. City of Atlantic City (I), 386 N.J. Super. 359, 369 (App. Div. 2006), aff'd as modified, 190 N.J. 359 (2007). We disagreed, however, that the trial court was without a remedy. First, we found that setting aside a contract that violated state law did not impermissibly tread upon federal jurisdiction. Id. at 380. Next, we noted that the federal district court order expressed an intent to exercise continuing jurisdiction over the parties to the settlement, which did not include OGI. We therefore concluded that the trial court had jurisdiction to fashion an appropriate equitable remedy. Id. at 378.
The Supreme Court granted certification and first undertook to review "the precise language of the dismissal order." Thompson (II), supra, 190 N.J. at 381. The pertinent language provided:
IT IS on this 31st day of January, 2002, ORDERED THAT:
(1) This action is hereby DISMISSED without cost and without prejudice to the right, upon motion and good cause shown, within 60 days, to reopen this action if the settlement is not consummated; and
(2) If any party shall move to set aside this Order of Dismissal as provided in the first decretal paragraph or pursuant to the provisions of Fed.R.Civ.P. 60(b), in deciding such motion the Court retains jurisdiction of the matter to the extent necessary to enforce the terms and conditions of any settlement entered into between the parties.
The Court next acknowledged "that federal courts generally do not find ancillary jurisdiction over a settlement agreement unless the order expressly retains jurisdiction." Ibid. (citing In re Phar-Mor Secs. Litig., 172 F.3d 270, 275 (3d Cir. 1999)).
In reviewing the "precise language" of the order, the Court noted that the terms of the settlement were not incorporated into the order but that it allowed "'any party,' presumably limited to the lawsuit, to bring a motion before the federal district court 'to enforce the terms and conditions of [the] settlement.'" Ibid. The Court held:
We do not find that the federal district court intended to retain jurisdiction over a non-party to the original suit seeking to void the settlement agreement on public policy grounds. We conclude that the Superior Court had jurisdiction to decide the validity of the settlement agreement under state law.
[Id. at 382].
Of significance to our discussion in the present matter, however, is the language of the Court that immediately followed:
Nonetheless, we must acknowledge at least the possibility that Judge Irenas might have read his dismissal order differently. For that reason, out of an abundance of caution and as a matter of comity, the better course might have been for the Superior Court to decline to hear the matter until OGI first exhausted its potential federal remedies. Then, if the federal court concluded it had no jurisdiction, the Superior Court could have proceeded to render a decision on the validity of the settlement agreement. [Ibid.]
Here, the terms of the settlement agreement were incorporated into the consent order. Those terms addressed three specific categories of the dispute: (1) "Requirements Relating to the New Sunnyside Property"; (2) "Requirements Relating to Sunnyside's Existing Property on Ramshorn Drive"; and (3) "Mount Laurel Requirements," as well as numerous related issues within each category. It is therefore evident, not only by the court's language in the order expressly reserving to itself continuing jurisdiction to enforce the terms of the order but also by the extent of the terms of the settlement incorporated in the order, that the court intended to retain jurisdiction to enforce the order.
While plaintiffs were not parties to the action, the issues they raised before the Law Division touched upon issues embodied in the consent order. Consequently, even assuming the federal district court order was not intended to bind plaintiffs, we adopt the approach encouraged by our Court in Thompson (II) that "out of an abundance of caution and as a matter of comity, the better course [was] for the Superior Court to decline to hear the matter until [plaintiffs] first exhausted [their] potential federal remedies." Ibid. "Comity is grounded in notions of accommodation and good-neighborliness, and is a necessary expedient to preserve the delicate balance of power and harmonious relations among the various sovereigns of our federalist system." Ibid. (citing City of Philadelphia v. Austin, 86 N.J. 55, 64 (1981)). The Law Division's dismissal of plaintiffs' complaint here furthers this objective. In the event the federal district court determines that it lacks jurisdiction or declines to exercise jurisdiction over plaintiffs' claims, plaintiffs are not foreclosed from reinstituting their cause of action in the Law Division.
Consequently, whether based upon a lack of subject matter jurisdiction or based upon grounds of comity, the Law Division properly dismissed plaintiffs' complaint.