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Fresh Pond, L.L.C. v. Whitlock Mills

October 6, 2009

FRESH POND, L.L.C. A NEW YORK LIMITED LIABILITY COMPANY AUTHORIZED TO DO BUSINESS IN NEW JERSEY AS 170 LAFAYETTE, L.L.C., PLAINTIFF-APPELLANT,
v.
WHITLOCK MILLS, L.P., DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, C-13-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 21, 2009

Before Judges Rodríguez and Reisner.

Plaintiff Fresh Pond, L.L.C. appeals from two orders dated July 7, 2008 and August 11, 2008, enforcing a settlement with defendant Whitlock Mills, L.P. We affirm.

I.

This case arose from a dispute between two owners of commercial property on Lafayette Street in Jersey City. Fresh Pond, whose lot is surrounded by Whitlock's land, has a deeded access easement and an easement for fifty parking spaces on Whitlock's property to be provided at Fresh Pond's expense. In 2005, Fresh Pond filed a complaint alleging that Whitlock, which was building affordable housing units, was blocking Fresh Pond's access to its own land. The complaint also sought a declaratory judgment resolving a dispute over the location and cost of the fifty parking spaces to be built on Whitlock's property. Whitlock filed a counterclaim alleging breach of the easement agreement; that Fresh Pond had refused to pay for the cost of fifty parking spaces in a parking garage that Whitlock was constructing; and seeking a declaratory judgment concerning the parties' rights under the easement.

The parties resolved the ingress and egress dispute prior to the trial, after Whitlock constructed paved roads through its property. Further, it was clear from counsel's opening statements at the original trial on March 27, 2006, that the parties' dispute concerned parking. Fresh Pond asserted its right to surface parking spaces, while Whitlock wanted to provide the parking spaces in a garage it was already building, and wanted Fresh Pond to contribute $700,000 toward the cost of the garage. Additionally, Fresh Pond contended that Whitlock had built an encroachment ten feet onto its property; however, in his opening statement Whitlock's counsel unequivocally agreed that his client would remove the encroachment if Fresh Pond demanded its removal. Before hearing the first witness testify, the judge allowed the parties to engage in settlement negotiations. Toward the end of the afternoon on March 27, 2006, the parties advised Judge Olivieri that they had settled the parking space dispute for $275,000. Accordingly, the judge entered an order dismissing the case as settled and adjourned the trial.

However, during the course of subsequent efforts to reduce the settlement to writing, Fresh Ponds contended that the parties had not really arrived at a settlement. As a result, Whitlock filed a motion to enforce what it contended was a settlement of the litigation. Concluding that there were material factual disputes, Judge Olivieri conducted a plenary hearing.

At the plenary hearing, Wallace L. Scruggs, a partner in the Whitlock organization, testified that during the settlement negotiations, the parties reached an agreement that Fresh Pond would pay Whitlock $275,000 within ninety days. In return, Whitlock would construct fifty parking spaces "in the surface area closely approximating to [Fresh Pond's] building." Fresh Pond insisted on surface parking spaces, because they were much less expensive to build than garage spaces. According to Wallace, although construction access was not an issue in the lawsuit, while they were settling the parking issue the parties also agreed to negotiate the details of Fresh Pond's right of access in the future when it began rehabilitating the building on its property.

Wallace clarified that Fresh Pond's original complaint concerned blockage of access for the day-to-day operations of its warehouse on its property; allegedly Whitlock's construction activities were blocking Fresh Pond's access to its loading dock. According to Wallace, Judge Olivieri had resolved that initial access dispute by issuing an order early in the litigation. The complaint did not concern Fresh Pond's right to construction access, because Fresh Pond was not engaging in any construction at the time. In the settlement negotiations, however, the parties were trying to address Fresh Pond's eventual need for construction access, to avoid possible future disputes and litigation.*fn1 At the end of the March 27, 2006 trial day, Wallace understood that the parties had settled the litigation over the parking. He also believed they had settled the construction access issue, even if they still had to work out some of the specific details.

In his testimony, Jeffrey Herrmann, who was Whitlock's attorney in the underlying litigation, confirmed that all issues in that case, other than parking, had been resolved before the parties began their mid-trial settlement negotiations. He also confirmed that during those negotiations, the parties agreed on the essential terms of the parking settlement, including the amount plaintiff would pay, the time payment was due, and the location of the parking spaces adjacent to plaintiff's building.

He testified that the parties resolved the construction access issue by agreeing that when Fresh Pond began rehabilitating its building, it could use the future parking lot as a temporary staging area to park equipment and store building materials. He further testified that the parties agreed that Fresh Pond would have to provide insurance during the construction and limit the hours of construction so as not to interfere with Whitlock's tenants. Significantly, however, Herrmann denied that the settlement of the parking litigation was contingent on the parties' ability to settle other issues. According to Herrmann, at the end of the court day, the attorneys reported to Judge Olivieri that the case was settled.

Fresh Pond's attorney, Jack Jay Wind, also testified. According to Wind, on March 27, 2006 the parties did not reach a settlement, and did not tell Judge Olivieri that they had settled the case. On cross-examination, he agreed that at the end of the negotiations on March 27, the parties had agreed on fifty surface parking spaces and had agreed "in principle . . . where those 50 were going to be," i.e., adjacent to Fresh Pond's building. They also agreed that Fresh Pond would pay Whitlock $275,000, although he denied that the parties agreed it would be paid in ninety days. He testified that his client wanted to delay the ...


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