November 3, 2010
VALLEYBROOK COUNTRY CLUB, LLC, PLAINTIFF-APPELLANT,
GLOUCESTER TOWNSHIP COUNCIL, GLOUCESTER TOWNSHIP PLANNING BOARD, LINKS I AT VALLEYBROOK HOMEOWNERS ASSOCIATION, PLAYER'S PLACE CONDOMINIUM ASSOCIATION, INC., PLAYERS PLACE II CONDOMINIUM ASSOCIATION, INC.,*FN1 DEFENDANTS-RESPONDENTS, AND GLEN EAGLES AT VALLEYBROOK PROPERTY OWNERS ASSOCIATION, ST. ANDREWS AT VALLEYBROOK CONDOMINIUM ASSOCIATION, LINKS II AT VALLEYBROOK NEIGHBORHOOD ASSOCIATION, DEFENDANTS.
On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-5608-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 29, 2010
Before Judges Fuentes, Gilroy and Ashrafi.
Plaintiff Valleybrook Country Club, LLC, sought a declaratory judgment that a deed restriction does not apply to its golf course property. It now appeals from a final judgment and earlier orders of the Law Division dismissing its cause of action. We affirm.
Plaintiff purchased the golf course in 2000. In 1987, its predecessors in title had obtained approvals from the Gloucester Township Planning Board for residential development of approximately 255 acres comprising an existing twenty-seven-hole golf course and surrounding lands. In lieu of utilizing the entire acreage to build the full number of single-family homes possible under existing zoning regulations, the predecessors and their developer proposed cluster development of townhouses and condominiums at the same density, thus permanently preserving an eighteen-hole golf course on the land.
In November 1987, plaintiff's predecessors executed and recorded a deed to themselves giving a metes and bounds description of the golf course and stating:
The Property shall be restricted in use to an 18-hol[e] minimum par 70 golf course except for accessory and incidental uses such as a clubhouse, with or without eating facilities, maintenance buildings and a pro shop.
The deed included additional language expressing the intent of the restriction:
The purpose of those covenants is to protect the anticipations of the Township of Gloucester and the common grantees of the grantor in continuation of a golf course use as part of an overall scheme of development for the property herein restricted, with contiguous lands.
Because in 1987 the proposed subdivision of the land was still under review, the Planning Board agreed to a provision in the deed permitting, if necessary, future adjustment of the boundary lines of the restricted golf course property. That provision stated:
The above restrictions are unalterable; provided, however, that it is recognized that the exact outer boundaries of the 18- hole golf course may be subject to minor adjustments in the future as the surrounding property is subject to final subdivision.
The Township and the Grantor, its successors, heirs and assigns, shall enter into appropriate agreements in the future after final boundaries of the Golf Course are set as a result of final subdivision approvals in order to insure that the restrictive covenants set forth herein continuously control the boundaries of the Golf Course.
In reliance upon the developer's proposal and the deed restriction executed by the owners of the land, the Planning Board approved the subdivision and site plan, and 1,076 townhouse and condominium units were built and sold. A public offering statement, issued in accordance with the Planned Real Estate Development Disclosure Act, N.J.S.A. 45:22A-21, expressly notified potential buyers that the golf course would be permanently preserved. The owners of the 1,076 residential units now comprise six homeowners' associations named as defendants in this litigation.
In 2006, plaintiff filed a complaint for a declaratory judgment voiding the deed restriction and ruling that plaintiff is not prohibited from building more residential units on approximately five acres within the golf course property that are currently used as a driving range. At the time of the Planning Board action in 1987, a driving range existed at a different location on the golf course. It was moved to its current site during construction of the residential units so that it would be farther away from them.
Plaintiff's complaint alleged in two counts that the deed restriction did not apply to the driving range and that it is unenforceable because it does not precisely describe the boundaries of the restricted golf course property.
While the case was pending, plaintiff conducted a survey and determined that twenty-four of the 1,076 completed residential units encroach upon the metes and bounds of the restricted golf course property. Plaintiff amended its complaint to add a third count alleging abandonment of the deed restriction because of residential uses within the boundaries, and also because the property has been used for prohibited purposes over the years without objection, specifically the driving range and an independently-operated restaurant and bar.
Also while the action was pending, plaintiff moved to disqualify the attorney for the Gloucester Township Council and the Planning Board, Michael J. McKenna, on the ground that he had represented the Planning Board in 1987 and was a necessary witness in the case. Judge Kassel denied plaintiff's motion to disqualify McKenna.
Later, Judge Kassel granted defendants' motions for summary judgment dismissing the first two counts of plaintiff's amended complaint. He denied defendants' motion to dismiss the third count and plaintiff's cross-motion for summary judgment in its favor. Judge Kassel subsequently denied plaintiff's motion for reconsideration of those rulings.
The third count of plaintiff's complaint, alleging abandonment, was heard in a three-day bench trial before Judge Fox. At the conclusion of all evidence, Judge Fox heard argument and granted judgment to defendants dismissing the remainder of plaintiff's complaint. Judge Fox also dismissed defendants' counterclaim for reversion of the property to Gloucester Township because of plaintiff's alleged violations of the deed restriction.
Plaintiff filed a timely notice of appeal from three orders issued by Judge Kassel and the final judgment entered by Judge Fox. Defendants have not filed a cross-appeal.
We reject plaintiff's argument that Judge Kassel erred in granting summary judgment and dismissing the first two counts of plaintiff's complaint.
In reviewing a grant of summary judgment, an appellate court applies the same standard under Rule 4:46-2(c) that governs the trial court. See Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007). The court must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
In this case, the first two counts are not dependent upon resolution of any factual disputes. They involve questions of law - (1) whether as written the deed restriction is unenforceable because of the provision allowing future adjustment of the boundaries of the restricted property, and (2) whether as written the restriction applies to the portion of the golf course used as a driving range.
Plaintiff asserts that the law has long disfavored restrictive covenants encumbering the use of land because they impair its alienability. See Bruno v. Hanna, 63 N.J. Super. 282, 285 (App. Div. 1960); Fortesque v. Carroll, 76 N.J. Eq. 583, 586 (E. & A. 1910). Such covenants must be strictly construed against permanent restrictions. See Bubis v. Kassin, 184 N.J. 612, 624 (2005).
Plaintiff contends that the restriction in this case is unenforceable because the documents establishing it do not fiX the boundary lines of the restricted property but allow future adjustments. Relying on our holding in Cooper River Plaza East, LLC v. Briad Group, 359 N.J. Super. 518 (App. Div. 2003), plaintiff asserts that a deed restriction is unenforceable if the document establishing it does not give adequate notice to a subsequent purchaser regarding what is prohibited. See id. at 527. In Cooper River, we held that "the intent of the restriction must manifest itself in the language of the document itself," particularly when enforced against strangers to the original transaction, and that "an ambiguous term" could not be resolved "by resort to extrinsic evidence." Ibid. Plaintiff argues that a potential purchaser reviewing the deed in this case cannot determine precisely what area of land is restricted.
We reject plaintiff's argument because it seeks to set aside the deed restriction in its entirety on the ground that a provision unrelated to its proposed use of the property is vague and subject to modification in the future. We know of no authority that requires voiding a restriction in its entirety because of a vague provision that does not affect use of the property.
The deed restriction in Cooper River stated that "[n]o structure is to be erected on the premises adjacent to the premises forming the subject matter of this deed . . . forward of the present building line of the building presently situate on said adjacent premises." Id. at 522. A subsequent purchaser of the restricted lot had constructed a Wendy's restaurant with "a three-foot triangle at the entrance . . . in front of the original building line" on the adjacent lot. Id. at 524. We concluded that the phrase "present building line" was not adequately defined in the deed restriction, and its interpretation required resort to extrinsic evidence. Id. at 528-29. On its face, the document establishing the restriction did not give adequate notice to subsequent purchasers about what was prohibited by the restriction. Id. at 526, 528. We held that the encroachment by the three-foot triangle was "de minimis" and that the restriction was too vague to require reversion of the property to the original grantor for that violation. Id. at 529.
The dispute in Cooper River directly involved the vague term of the deed restriction, the meaning of "present building line" and the location of the three-foot triangle. In this case, the use plaintiff seeks does not affect the allegedly vague term, the exact location of the boundary lines. The driving range is located entirely within the interior of the property and would not be affected by minor adjustments to the metes and bounds description contained in the deed. Plaintiff's claims do not implicate the allegedly uncertain and vague provision allowing minor adjustment of the boundary lines.
In Homann v. Torchinsky, 296 N.J. Super. 326 (App. Div.), certif. denied, 149 N.J. 141 (1997), we affirmed enforcement of a deed restriction limiting neighborhood homes to residential use against defendant's conducting his oral surgery practice in his home. While acknowledging the general rules of construction disfavoring enforcement of a vague restriction, id. at 335, we also said:
[A]bsent "explicit indication of a special meaning" words must be given their ordinary meaning. Where the terms of a contract are clear and unambiguous there is no room for interpretation or construction and the courts must enforce those terms as written.
[Id. at 336 (internal quotation marks and citations omitted).]
See also Bubis, supra, 184 N.J. at 624 ("[I]t is well settled that a covenant should not be read in such a way that defeats the plain and obvious meaning of the restriction.") (citation omitted).
Plaintiff's deed contains precise metes and bounds. It also states unequivocally that the property is restricted to use as an eighteen-hole par seventy golf course and its accessory and incidental uses. The deed also expresses the purpose of the restriction. The language used in the deed is not vague and cannot be interpreted as permitting residential development of the interior portions of the property.
There is no factual dispute that the metes and bounds description includes the land currently used as a driving range and that minor adjustments along the outer bounds of the property would not change that fact. The documents on their face give adequate notice to subsequent purchasers that the driving range, and other land well within the metes and bounds description of the deed, are restricted against any use except as a golf course and its related uses. Those lands may not be used for residential development.*fn2
The Law Division correctly granted summary judgment dismissing count two of plaintiff's complaint.
Next, plaintiff argues that the land used as a driving range is not specifically listed in the restrictive language of the deed. We reject this contention without extensive discussion. R. 2:11-3(e)(1)(E).
By listing "clubhouse, with or without eating facilities, maintenance buildings and a pro shop" the language of the deed restriction does not exclude other "accessory and incidental uses" related to the principal golf course use. The driving range is an accessory or incidental use of the golf course, just as a practice putting green or an enclosure for golf carts might be. At its present location, the driving range has been part of the golf course for more than twenty years, and a driving range existed on the property when the deed restriction was executed.
The Law Division correctly granted summary judgment to defendants and dismissed count one of plaintiff's complaint.
Plaintiff argues that defendants abandoned the deed restriction by allowing the building of twenty-four residential units that encroach onto the metes and bounds of the golf course, and also by allowing use of the property to operate a driving range and an independently-managed bar and restaurant. Defendants deny abandonment, alleging that no one was aware of the minor encroachment by the twenty-four residential units before commencement of this litigation, and also contending that the driving range, restaurant, and bar are permitted accessory uses of the golf course. After trial, Judge Fox concluded that defendants had not abandoned the benefits of the restriction, and she dismissed count three of plaintiff's complaint.
We have a limited standard of appellate review from the decision of a trial court in a bench trial. Plaintiff argues that, under the standard established in Dolson v. Anastasia, 55 N.J. 2, 5 (1969), for entry of judgment under Rules 4:40-1 and -2, the trial court was required to accept as true all evidence and reasonable inferences supporting its position. The cited rules and the Dolson standard apply when the court decides not to submit an issue to the jury, or when it sets aside the jury's verdict and enters a different judgment. In a bench trial, the court is the only finder of the facts and is charged with deciding the outcome. In performing its factfinding function at the end of the presentations, the court is not bound to favor either party when it weighs the evidence and determines what reasonable inferences to draw from the evidence.
"Findings by the trial judge are considered binding on appeal when supported by adequate, substantial and credible evidence." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). "[W]e do not disturb the factual findings and legal conclusions of the trial judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Ibid. (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963)). An appellate court "may not 'engage in an independent assessment of the evidence as if it were the court of first instance.'" In re Taylor, 158 N.J. 644, 656 (1999) (quoting State v. Locurto, 157 N.J. 463, 471 (1999)). So long as "there is sufficient credible evidence in the record to support the findings[,]" we defer to the trial court. Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 397 (2009) (quoting State v. Adams, 194 N.J. 186, 203 (2008)).
Here, Judge Fox's findings and conclusions are amply supported by the evidentiary record and the applicable law.
Deed restrictions are deemed to have been abandoned where pervasive violations or changed circumstances show an intent to abandon the restrictions. Murphy v. Trapani, 255 N.J. Super. 65, 73-74 (App. Div.), certif. denied, 130 N.J. 17 (1992). The party seeking to set aside a deed restriction has a heavy burden to prove abandonment or modification. Steiger v. Lenoci, 323 N.J. Super. 529, 534 (App. Div. 1999). Minor and isolated violations will not demonstrate an intent to abandon the restrictions. See Homann, supra, 296 N.J. Super. at 336.
In this case, there was no evidence that any officials were aware the twenty-four residential units encroached upon the metes and bounds of the golf course property. The surveys of the twenty-four homeowners did not refer to the restriction, and the owners of the golf course did not bring the encroachments to the attention of the developers or Township officials. When approvals and certificates of occupancy were issued for the twenty-four residential units, Township officials were not aware of the encroachments. The encroachments first came to light in this litigation when plaintiff's expert prepared a computerized overlay map. Plaintiff stipulated at trial that there was no evidence of subjective intent by any persons to allow the encroachments despite the deed restriction.
Plaintiff argues that abandonment does not depend on subjective intent but on objective facts establishing that the restrictions were not enforced. Nevertheless, the evidence supported Judge Fox's conclusion that the encroachments were not pervasive and, when viewed objectively, did not demonstrate an intent by Township officials or property owners to abandon the deed restriction. The twenty-four units constituted less than three percent of the total number of units constructed and less than 2.5 acres out of a total land area of about 255 acres. No one objected to construction of the twenty-four units, and testimony at trial established that the units did not interfere with use of the golf course.
The court's conclusion that the twenty-four residential units did not prove abandonment of the restriction is consistent with the facts and our holding in Steiger, supra, 323 N.J. Super. at 534.
We also reject plaintiff's argument that the bar and restaurant are prohibited uses that prove abandonment. Plaintiff cites Willingboro Country Club, Inc. v. Levitt & Sons, Inc., 69 B.R. 414 (Bankr. D.N.J. 1987), in which the federal bankruptcy court concluded that construction of tennis courts and a swimming pool demonstrated abandonment of a covenant restricting property to a golf course. That decision is not binding legal authority, and, more important, its facts are clearly distinguishable from those in this case.
Here, the deed restriction permits "eating facilities" as accessory to the golf course. A restaurant was a permitted use under the restriction, and a bar could rationally be viewed as part of the eating facilities. No evidence was presented to show that the manner of operating a restaurant and bar established an intent to abandon the restrictions on golf course use of the property.
The trial court did not err in granting judgment to defendants dismissing count three of plaintiff's complaint.
Finally, plaintiff argues that Judge Kassel erred in refusing to disqualify McKenna as attorney for the Township and Planning Board. Plaintiff cites RPC 3.7 as the ground for McKenna's disqualification, arguing that McKenna had personal knowledge of the circumstances when the deed restriction was executed and was thus a necessary witness in the case.
Plaintiff's argument seems contrary to its position that the language of the documents, rather than extrinsic evidence of the parties' intentions in 1987, was the controlling factor in deciding the enforceability of the deed restriction. Even if disputed issues depended on facts personally known to McKenna, other persons also had the same knowledge. Plaintiff did not show that McKenna was a necessary witness.
Furthermore, contrary to plaintiff's argument, the trial court was capable of distinguishing between evidence presented through sworn testimony or certifications of witnesses and statements made by McKenna in arguing as an attorney. Plaintiff has not demonstrated that it suffered prejudice because McKenna was personally knowledgeable of and conversant with the underlying facts. We find no error in denial of plaintiff's motion to disqualify McKenna.