July 31, 2009
PARK CENTER AT ROUTE 35, INC., PLAINTIFF-RESPONDENT,
THE ZONING BOARD OF ADJUSTMENT OF THE TOWNSHIP OF WOODBRIDGE, DEFENDANT, AND DR. NORMAN LEPO, DEFENDANT/INTERVENOR-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-4733-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 22, 2009
Before Judges Lihotz and Messano.
This matter is now before us for the third time. In Park Ctr. at Route 35, Inc. v. Zoning Bd. of Adjustment of the Twp. of Woodbridge, 365 N.J. Super. 284, 287-88 (App. Div. 2004) (Park Center I), plaintiff appealed from Judge James P. Hurley's decision affirming the denial of its amended minor site plan application by defendant (the Board). We affirmed, concluding that the Board acted reasonably in denying plaintiff's application--an attempt "to avoid its obligation to perform Phase II" of its development project--because the Board's "approval of the initial application was conditioned upon the later completion of Phase II." Id. at 289. Phase II of the development contemplated the destruction of an existing building, known as the "Park Sweet Shop," so as to provide six additional parking spaces for other commercial enterprises constructed in Phase I of the development. Id. at 287. We concluded that plaintiff "was obligated to either perform Phase II or return to the Board to show there was a sufficient change in circumstances warranting a departure from the Board's earlier requirement that Phase II be completed." Id. at 291.
Thereafter, various applications were made before Judge Hurley by the Board to force demolition of the Sweet Shop building and to order completion of Phase II. It suffices to say that plaintiff repeatedly attempted to delay its implementation of the trial court's orders, culminating in the judge entering an order to show cause sua sponte on May 6, 2005, returnable June 3, 2005. In the interim, plaintiff entered into a consent judgment on May 11, 2005 in which it agreed to commence remediation of the site and construct the additional parking spaces originally contemplated.
Intervenor, Dr. Norman Nepo, had been involved in the litigation prior to our decision in Park Center I. Nepo owned two parcels of land.*fn1 He entered into a contract to sell one parcel to plaintiff for inclusion in the development project, a strip mall with parking and site improvements. The contract called for a portion of the second parcel, upon which Nepo maintained a medical practice, to be conveyed subject to a cross-easement agreement (the Agreement), which we discuss in further detail below. Nepo alleged in his counterclaim that plaintiff had breached its contract with him by seeking to avoid construction of Phase II, thus denying him access to parking spaces he claimed were promised for his use pursuant to the Agreement. He filed a response to the order to show cause, seeking damages based upon plaintiff's alleged breach.
Nepo argued that pursuant to the Agreement, he was entitled to recover counsel fees as damages occasioned by plaintiff's breach. Judge Hurley, who had earlier sanctioned plaintiff $2500 for its dilatory tactics, converted that sanction into a counsel fee award payable to Nepo. Nepo, whose fee request at that time totaled more than $17,000, moved for summary judgment, and plaintiff cross-moved seeking the same relief. The parties stipulated that Nepo's sole claim for damages was his counsel fees, the six additional parking spaces, to which Nepo claimed access under the easement agreement, having already been constructed.
Judge Hurley denied Nepo's motion, granted plaintiff's, and dismissed the counterclaim, finding that Nepo's alleged damages were not recoverable. This led to Nepo's appeal, which we considered and decided in an unpublished opinion, Park Ctr. at Route 35, Inc. v. The Zoning Bd. of Adjustment of the Twp. of Woodbridge, No. A-1240-05 (App. Div. March 23, 2007) (Park Center II). We reversed the dismissal of Nepo's counterclaim, and remanded the matter for further proceedings. Specifically, we ordered Judge Hurley on remand to "determin[e] [whether] the actions of [plaintiff] by attempting to unilaterally amend the site plan and appealing the Board's denial constitut[ed] a breach of the [A]greement between [plaintiff] and Nepo." Id. at 9. We specifically noted that additional factfinding was necessary. Ibid.
Nepo now appeals from the non-jury trial on remand that resulted in Judge Hurley's conclusion that "[plaintiff's] actions did not constitute an actual or anticipatory breach of the Agreement." He raises the following issues for our consideration:
I. THE TRIAL COURT ERRED WHEN IT IGNORED THE SUBSTANTIAL EVIDENCE THAT [PLAINTIFF] BREACHED ITS AGREEMENT WITH DR. NEPO AND IS THEREFORE OBLIGATED TO PAY DR. NEPO'S DAMAGES PURSUANT TO SAID AGREEMENT.
II. THE TRIAL COURT'S FACTUAL FINDINGS ARE CONTRARY TO THE APPELLATE DIVISION DECISIONS IN PARK CENTER I AND PARK CENTER II.
We have considered these arguments in light of the record and applicable legal standards. We affirm.
Our review of the factual findings made by the judge in a non-jury trial is quite limited. Estate of Ostlund v. Ostlund, 391 N.J. Super. 390, 400 (App. Div. 2007). "'[W]e do not weigh the evidence, assess the credibility of witnesses, or make conclusions about the evidence.'" Mountain Hill, L.L.C. v. Twp. of Middletown, 399 N.J. Super. 486, 498 (App. Div. 2008) (quoting State v. Barone, 147 N.J. 599, 615 (1997)). In general, the judge's factual "findings . . . should not be disturbed unless they are so wholly insupportable as to result in a denial of justice[.]" Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974) (quotation omitted). However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995).
The only witnesses produced at the remand trial were Nepo and David Hutt, plaintiff's president and a shareholder in the corporation. The original contract between plaintiff and Nepo made the sale of Nepo's property contingent upon plaintiff securing its development approvals, and provided in relevant part that
[i]n the event Buyer receives all approvals necessary . . ., Buyer and Seller shall enter, at time of closing, a non-exclusive cross-access, cross-parking and cross-pedestrian agreement, whereby Buyer's property . . . and Seller's property . . . shall share vehicular access, parking and pedestrian traffic. The form of easement shall be prepared by Buyer's attorney and shall be subject to review and approval of Seller's attorney.
Thereafter, at the closing on June 11, 1998, Nepo and plaintiff executed the anticipated easement agreement which stated purpose was as follows:
Nepo and [plaintiff] are desirous of granting cross-parking easements whereby the users of the Nepo Property shall have the benefit of utilizing in common and for the mutual benefit of the users of  [plaintiff's] Property all of the parking areas on or to be constructed on the [plaintiff's] Property and whereby the users of the [plaintiff's] Property shall have the benefit in common and for the mutual benefit of the users of the Nepo Property all of the parking areas on the Nepo Property.
To effectuate the stated purpose, the Agreement provided that plaintiff "grant[ed] and convey[ed]" to Nepo a non-exclusive, continuous and perpetual parking easement over, upon and across all parking areas, aisles and driveways on  [plaintiff's] Property for the benefit of Nepo, and its invitees, lessees, licensees and guests for the purposes of vehicular parking and associated pedestrian traffic . . . in connection with the use of [Nepo's office building] only.
Nepo made a similar grant of his property to plaintiff. The easement agreement further provided that "[t]he . . . easement . . . shall be used in accordance with that certain site plan . . . which . . . was the subject of site plan approval from the [Board][.]" That site plan showed the anticipated construction of Phase II's six additional parking spaces.
Nepo and plaintiff further agreed to indemnify and hold harmless the other "from and against any [d]amage incurred or resulting from a breach of any of the warranties, representations and covenants made in this Easement Agreement or from any facts or circumstances constituting such a breach." The Agreement defined "damages" to mean "all liabilities, losses, assessments, claims, demands, causes of action, judgments, damages, costs and expenses (including interest, penalties and counsel fees)." The Agreement could "only be changed or amended by  written agreement signed by all parties."
After hearing Nepo's and Hutt's testimony, in a concise and thorough written opinion, Judge Hurley noted that in order to determine whether plaintiff breached the Agreement with Nepo, it was first "necessary to define the material terms of the agreement[.]" These were "(1) Nepo is to convey a portion of his lands to [plaintiff] which he did; (2) [plaintiff] is to pay $100,000 for the said land which it did; and (3) [the] parties are to enter into a cross easement agreement to allow each access to and parking on their respective lands which they did." Judge Hurley noted that Nepo did not claim that he or any of his patients were denied parking access as a result of plaintiff's "construction or use" of the properties.
The judge further noted that neither the contract of sale nor the Agreement "provide[d] either party with a guaranteed number of parking spaces." Judge Hurley further found that
Nepo knew that there was to be a Phase II. There was no agreement between Nepo and [plaintiff] as to when Phase II would be completed. Nepo knew and understood that Phase II would delay the construction of the additional parking with no definite date given for the demolition of the [Park Sweet Shop] located on the Phase II portion of the development. The only reference to timing is found in the presentation by [plaintiff] before the Board . . . [which] found that "[t]he [Park Sweet Shop] [wa]s proposed to be demolished and converted to six (6) parking spaces at a later date."
Specifically referencing our decision in Park Center I, the judge further noted that plaintiff was permitted to seek amendment of the site plan.
Judge Hurley found that "[i]f the timing of the implementation of Phase II and therefore the addition of 6 parking spaces was intended to be a material term of the Agreement, it would have been contained in the Agreement." Although Phase II was "a condition of approval granted by the Board[,]" Judge Hurley concluded "that the time to implement Phase II and the timing of the construction of the additional six  parking spaces were not material terms" of the Agreement. He further noted that "[e]ven without the additional six  spaces, Nepo ha[d] not been deprived of parking on either his property or on [plaintiff's] property," further supporting the conclusion that construction of the six additional spaces was not a material element of the Agreement. He found that by seeking amended site plan approval, and thereafter appealing the Board's denial, plaintiff had not committed an anticipatory breach of its contract with Nepo.
Nepo argues that the judge erred in this conclusion. He contends that even if plaintiff had the right to seek amendment of the site plan, that "d[id] not mean that such action [wa]s not a breach of [its] contractual . . . undertaking with" him. We concede that plaintiff's right to seek amendment of the site plan does not foreclose the possibility that such action could constitute an anticipatory breach of the Agreement it made with Nepo. See e.g. Palisades Props., Inc. v. Brunetti, 44 N.J. 117, 135 (1965) (noting restrictive covenants contained in deeds remained viable despite changes in the zoning ordinance to permit such use). However, we agree with Judge Hurley that plaintiff's actions did not amount to an anticipatory breach of any of the material elements of the Agreement.
Traditionally, a party commits an anticipatory breach when it "renounces or repudiates a contract by unequivocally indicating that it will not perform when performance is due." Cipala v. Lincoln Technical Inst., 354 N.J. Super. 247, 251 (App. Div. 2002), aff'd in part, rev'd in part, 179 N.J. 45 (2004). However, "the modern view does not 'limit anticipatory repudiation to cases of express and unequivocal repudiation of a contract. Instead, anticipatory repudiation includes cases in which reasonable grounds support the obligee's belief that the obligor will breach the contract.'" Spring Creek Holding Co. v. Shinnihon U.S.A. Co., 399 N.J. Super. 158, 179 (App. Div.) (quoting Danzig v. AEC Corp., 224 F.3d 1333, 1337 (Fed. Cir. 2000), cert. denied, 532 U.S. 995, 121 S.Ct. 1656, 149 L.Ed. 2d 638 (2001)), certif. denied, 196 N.J. 85 (2008).
Plaintiff clearly attempted to avoid construction of Phase II of the development which was essentially comprised of two components--demolition of the Sweet Shop building and converting that space into six parking spaces in addition to the seventy-two parking spaces created in Phase I of the development. As the trial judge found, neither the contract for sale, nor the Agreement provided that Nepo would gain access to a specific number of parking spaces or that the six additional spaces were in any way intended solely for his use. At trial, Nepo testified that the discussions he had prior to the sale with Ralph Mooci, Park Center's developer, centered upon an agreement "whereby [Nepo] had access to the entire parking lot, so that overall . . . [his] parking would be enhanced." He also anticipated that his office building would not be affected, but that plaintiff would "improve [the property] with curbing and landscaping." All these objectives were clearly met without construction of Phase II because the Agreement granted Nepo and his patients access to all parking in the development, thus "enhanc[ing]" the number of spaces available. It is apparently also undisputed that plaintiff made the anticipated site improvements.
Nepo further testified that the only guarantee contained in the easement agreement was that he "would have access to all of the parking." He acknowledged that he understood there would be a Phase II of the development and that no specific timeframe was contemplated, though Mooci clearly told him six more spots would be created when the Sweet Shop was demolished. Nepo admitted that the easement agreement did not prohibit plaintiff from seeking to amend its development plan.
In the end, Nepo is left with a single thread upon which to secure his claim that plaintiff was guilty of an anticipatory breach, i.e., the Agreement's reference to the approved site plan. Nepo contends that because Park Center I held that construction of Phase II was a specific condition of the approval for Phase I, any decision not to construct Phase II was ipso facto a breach of the easement agreement. However, this misconstrues our holding in Park Center I.
There, we specifically reserved the possibility that plaintiff could amend its site plan by "return[ing] to the Board to show there was a sufficient change in circumstances warranting a departure from the Board's earlier requirement that Phase II be completed." Park Center I, supra, 365 N.J. Super. at 291. We were not asked, nor did we decide, whether such a course of conduct would amount to an anticipatory breach of the specific agreement plaintiff made with Nepo.
More importantly, the agreement only required plaintiff to grant Nepo "a non-exclusive, continuous and perpetual parking easement over, upon and across all parking areas, aisles and driveways on [its] Property for" his benefit. There is no dispute that this occurred. The result of this grant was that Nepo and his patients had access to all seventy-two parking spaces constructed by plaintiff, as opposed to the nine spaces that existed previously on the parcel Nepo transferred to plaintiff. Seen in this light, plaintiff's attempt to avoid construction of six additional spaces as shown on the approved site plan is not an anticipatory breach of any material term of the Agreement. See Neptune Research & Dev., Inc. v. Teknics Indus. Sys., 235 N.J. Super. 522, 531-32 (App. Div. 1989) (holding anticipatory "breach is 'material'" if it "[goes] to the essence of the contract") (quoting Ross Systems v. Linden Dari-Delite, Inc., 35 N.J. 329, 341 (1961)); and see Restatement (Second) of Contracts § 250 comment d (1981) (requiring repudiation to be a "threatened breach . . . of sufficient gravity"). Having heard the testimony, Judge Hurley concluded that Nepo had received the benefit of all material terms of the Agreement. We will not disturb such a finding.
We view Nepo's second argument to be of insufficient merit to warrant any extensive discussion in this opinion. R. 2:11-3(e)(1)(E). As we already noted, our decision in Park Center I did not foreclose plaintiff's effort to amend the site plan and eliminate Phase II by demonstrating a change of circumstance. Nor did our decision consider whether such an amendment would amount to an anticipatory breach of plaintiff's Agreement with Nepo. In Park Center II, we specifically remanded the matter to Judge Hurley for a plenary hearing to determine whether plaintiff committed a breach of the Agreement. He did so, and we find Nepo's argument that the judge's determination is contrary to factual findings contained in either of our prior opinions to be unpersuasive.