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1404 Washington Street, LLC v. Riggins

October 28, 2009

1404 WASHINGTON STREET, LLC, A LIMITED LIABILITY COMPANY OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
RIGGINS, INC., A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Cape May County, Docket No. C-26-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued Telephonically October 7, 2009

Before Judges Carchman and Ashrafi.

Defendant Riggins, Inc. appeals from a judgment of the General Equity Part reforming a deed to substitute restrictive language as to the use of property. We affirm.

The facts are not complex. In 1987, R. Paul Riggins entered into a contract of sale with Dennis deSatnick and Anita K. deSatnick for the sale of real property located at 1404 Washington Street in the City of Cape May (the property). The deSatnick's subsequently assigned their interest in the contract to plaintiff 1404 Washington Street, LLC and by an addendum to the contract, the seller was identified as L.S. Riggins Oil Company (subsequently changed to plaintiff Riggins, Inc.). At the time of the execution of the contract, the property had been utilized as a gas station, and defendant was moving its gas station operation to a new location across the street from the property.

Paragraph 10 of the agreement of sale provided in relevant part, that

[i]n this sale, the Seller agrees to provide and the Buyer agrees to accept a deed known as a Bargain and Sale Deed with Covenants against the Acts of the Grantor with a restriction precluding the use of the property as a gasoline service station and/or an automotive repair and service center.

Because the property required environmental remediation, settlement did not take place until twenty-years later, November 7, 2007. On November 5, 2007, defendant's counsel*fn1 forwarded to plaintiff's attorney, a copy of the proposed deed. The deed was a bargain and sale deed with covenant against grantor's acts and contained the following restrictive language:

The lands and premises described herein and conveyed hereby are conveyed subject to the restriction that said lands and premises shall not be sued as and for a gasoline service station nor any other facility either as a stand alone facility or in connection with any other lands and premises for the sale, dispensing or storage of gasoline, diesel fuel or any motor fuels of any nature. [(Emphasis added).]

No issue was raised regarding the restrictive language, and the matter proceeded to settlement.

According to Riggins, the restrictive language in the contract was an important element in the transaction.

[W]e bought the gasoline station across the street from the - - this property which was also used as a gas station, and since we bought the one across the street, we were going to sell this property, and it was our intention that we would restrict it so that it could - - we wouldn't have a gasoline competitor across the street from us.

When deSatnick received a copy of the deed from the title company after settlement, he observed the language of the restriction. This prompted discussion between the ...


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