December 2, 2010
BREAKWATER COVE CONDOMINIUM ASSOCIATION, PLAINTIFF-RESPONDENT,
MARY CHIN, ESTATE OF MARY CHIN, JIM CHIN AND
LYNN SURGALLA-CHIN, DEFENDANTS-APPELLANTS.
On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-2995-08.
The opinion of the court was delivered by: Miniman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: June 9, 2010 -- Decided: Before Judges Payne and C.L. Miniman.
The opinion of the court was delivered by MINIMAN, J.A.D.
Defendants Jim Chin (Jim), individually and under a January 12, 2006, power of attorney from Mary Chin (Mary), and Lynn Surgalla-Chin (Lynn) appeal from a summary judgment declaring them in violation of condominium restrictions on harboring birds, compelling them to permanently remove the birds, ordering them to pay fines of $5330, and compelling them to pay attorneys' fees and costs in the amount of $32,007.91. Because the restrictive covenant permits "household pets," and because that term is commonly understood to include birds, we reverse.
The Sponsor of Breakwater Cove, A Condominium (Breakwater Cove), established Breakwater Cove by a Master Deed recorded on December 30, 1980, and also established plaintiff Breakwater Cove Condominium Association (the Association). The Association's Bylaws were recorded with the Master Deed. Breakwater Cove is a residential condominium complex located in Monmouth Beach. There are five residential buildings in which there are a total of eighty-two individual dwelling units plus common elements. Title to each condominium unit is taken subject to the restrictive covenants contained in the Master Deed. The Master Deed is enforced by the Board of Directors (the Board) of the Association.
Benjamin D. Lambert, Jr., Esquire, prepared the Master Deed. As is commonly done with condominiums, the Master Deed contained covenants, restrictions, and easements limiting the uses to which individual unit owners could put their units and the common elements. The restrictions are contained in paragraph 11, which contains twenty-five subparagraphs. The restriction primarily at issue here is paragraph 11(c), which provides:
No bird, reptile, or animal of any kind shall be raised, bred, or kept in any Unit or anywhere else upon the Property except that dogs, cats or other household pets are permitted, not to exceed two in the aggregate, provided that they are not kept, bred or maintained for any commercial purpose, are housed within the Unit and abide by all applicable Rules and Regulations. No outside dog pens, runs or yards shall be permitted.
Additionally, Article V of the Association's Bylaws authorizes the Board to adopt regulations for "pet controls." The Master Deed further prohibits conduct that constitutes a nuisance, providing in paragraph 11(n) that "[n]o noxious or offensive activities shall be carried on . . . which may be or become an annoyance or nuisance to the other residents in [Breakwater Cove]." Owners who violate the restrictive covenants are subject to fines not to exceed ten dollars per day for a single violation.
Mary, now deceased, acquired title to a condominium unit at Breakwater Cove in 1993. Mary's son Jim, his wife Lynn, and their son Brian lived with Mary prior to her death and are the current occupants of the unit. Since 2004, defendants have kept an African grey parrot named Polly in the unit. They also have another bird named Kelvin, which they acquired after 2004.
On October 12, 2005, the property manager for Breakwater Cove, Ernest B. Racz, wrote to Mary asserting that she was in violation of paragraphs 11(c) and 11(n) by keeping a bird in the unit and permitting it to chatter and whistle to the annoyance of other residents. Mary was given two weeks to remove the bird or the Board would begin fining her $10 per day. Racz again wrote to Mary on November 18, 2005, noting that the violation had not been corrected as of November 7, 2005. As of that day, fines were being assessed against her unit at the rate of $10 per day. He advised that when the fines totaled $300, the Board would instruct the Association's attorneys to file a lien on her unit.
On January 18, 2006, Mabel Iazicki, manager, wrote to Mary advising her that, if the Board did not hear from her within fourteen days, it would instruct its attorney to file the lien. On June 20, 2006, the Association's attorney wrote to Mary regarding her pet bird, which was "disturbing neighboring unit owners," and asked that she contact him.
On April 3, 2008, Thomas V. Giaimo, Esquire, counsel to the Association, wrote to Mary informing her that the Association continued to receive complaints from other unit owners about her bird, which he described as a "nuisance." Relying on paragraphs 11(c) and 11(n), he demanded removal of the bird within fourteen days. If there was no compliance, the Association would avail itself of the remedies allowed by paragraph 15 of the Master Deed, including a petition for injunctive relief. He notified her that the Board proposed to suspend her membership privileges. Finally, he informed her of her right to alternate dispute resolution (ADR). The last page of this letter is missing from the record.
On April 19, 2008, Chin applied to the Association for ADR in accordance with the written procedures for the resolution of disputes contained in the "Breakwater Cove Association Policy Regarding Alternative Dispute Resolution" (ADR Policy), adopted by the Board pursuant to the Condominium Act, N.J.S.A. 46:8B-1 to -38. The ADR Policy affords parties a three-stage procedure for resolving disputes: informal mediation, followed by formal mediation, and then binding arbitration.
On May 29, 2008, the Association held an informal mediation hearing attended by Jim and Lynn, who informed the Association of their intent not to remove the birds. On May 30, 2008, Giaimo again wrote to Mary, this time with respect to the ADR conducted on May 29, 2008, at the Monmouth Beach Borough Hall. He reported to Mary that the ADR was conducted by a court-appointed mediator. Mary did not attend, but Jim and Lynn did so. The mediation was unsuccessful, and afterwards Jim stated that the birds would not be removed from the unit. As a result, the Board gave formal notice of suspension of membership privileges and the continuing imposition of fines.
On June 11, 2008, after informal mediation was unsuccessful, Mary requested formal mediation and then arbitration pursuant to the ADR Policy. Formal mediation was not initiated prior to this litigation commencing.
On June 23, 2008, the Association filed a Verified Complaint and Order to Show Cause, alleging that defendants were in violation of paragraphs 11(c) and 11(n) of the Master Deed. The order was entered on June 30, 2008, and made returnable on July 17, 2008.
Defendants answered the complaint on July 14, 2008, and asserted counterclaims that the Association was obliged to comply with its duly adopted ADR Policy pursuant to N.J.S.A. 46:8B-14(k). That policy allegedly provided "a progressive system of alternate dispute resolution, beginning with an option[al] informal, internal mediation, progressing to a formal mediation, and 'if mediation does not result in settlement, the dispute shall be resolved by arbitration.'" The ADR Policy specified that the formal mediation was to be conducted in accordance with the Mediation Rules of the American Arbitration Association (AAA). Defendants alleged that they initially had requested mediation on April 19, 2008, but the Association violated its duly adopted ADR Policy in several respects, including the failure to progress to binding arbitration.*fn1 They sought a judgment dismissing the complaint or in the alternative, a stay pending AAA arbitration, and a declaration that a bird is not a prohibited pet within the meaning of the Master Deed. The Association's authority under the governing documents to file suit under N.J.S.A. 46:8B-16(b) to enforce the Master Deed is not challenged.
At the order to show cause hearing, the parties agreed to non-binding arbitration before retired Judge Francis Piscal. Piscal issued a written decision in favor of the Association, finding that parrots did not qualify under the exception for "household pets" because all birds are prohibited. The covenant would be meaningless if birds were both prohibited and excepted. Piscal further found that the birds constituted a nuisance after hearing testimony from Jim and other witnesses "that the bird made noises . . . heard outside the premises."
After defendants rejected Judge Piscal's decision on February 19, 2009, the parties stipulated that summary judgment was appropriate on the issue of the interpretation of paragraph 11(c), which, if resolved in favor of the Association, would render moot the remaining nuisance claim and permit final judgment.
The Association's July 2, 2009, summary judgment motion was supported by a purported expert report from Lambert, who drafted the Master Deed and who was offered as a fact and expert witness. In the report, Lambert addressed the Sponsor's intent:
Ironically, the restriction in question, as originally drafted for review by the under-signed's client, contained an absolute prohibition against any type of "pet[."] In fact, the undersigned recalls that the restriction read to the effect: "No bird, reptile, or animal of any kind shall be raised, bred or kept in any Unit or anywhere else upon the Property." The proposed language was, however, changed at the request of the exclusive Realtors who were marketing the Units within the Condominium on behalf of the Sponsor, Teddy Construction Co. Those Realtors, operating under the name of: "The Condo Mart[,"] requested the Sponsor and the undersigned as the Sponsor's counsel to modify the draft of the restriction in question so as to permit Unit Owners to have dogs and cats and so as not to be interpreted as precluding the keeping of an aquarium. There was never any discussion of relaxing the restriction so as to permit birds, reptiles or other animals, nor was there any desire to have the restriction modified so as to leave to the discretion of the Board of Directors of the Association to determine on a case by case basis what type of bird, reptile, etc. might constitute a "household pet[."] Essentially, the intent was to permit dogs and cats but subject to the limitations otherwise stated in the provisions of the restrictive covenant in question.
Lambert also submitted a certification attesting to his background and experience and his activities as the scrivener of the Master Deed. He explained that the deed was originally drafted to bar all pets. However, the exclusive realtor raised a concern that such a prohibition would be problematic because many prospective purchasers would want to be able to have a dog or cat. The Sponsor and the realtor agreed to modify the absolute prohibition. He affirmed that the position of the Association was consistent with his intent as the scrivener of the document--"'no bird' . . . mean[t] exactly that, no bird." The Association's motion was also supported by an affidavit from Roy L. Bernstein, a member of the Board, who attested to the complaints from other unit owners and the extent to which the birds were a nuisance. The President of the Association, Marianne Salimbene, also submitted a supporting affidavit.
Defendants cross-moved for summary judgment and sought an order barring the Lambert report.
At the hearing on the cross-motions, the judge outlined the parties' respective positions and heard argument from both sides. Defendants' counsel argued that the word "no" modified "the compound subject birds, reptiles, and any animals" and that the exception for "dogs, cats, and other household pets" modified the compound subject, permitting unit owners to have dogs, cats, birds, reptiles, and any animals kept as household pets. In other words, "every single animal in the animal kingdom [is prohibited], except for household pets."
The Association's counsel argued that defendants were advancing "a very strained interpretation of what we believe to be clear and express prohibitory language" regarding maintaining a bird in a condominium unit. He urged that Lambert's factual assertions and expert opinions compelled a conclusion that birds were absolutely prohibited. Defendants contended that the parole evidence rule prohibited the judge from considering Lambert's report and certification with respect to the intended meaning of the restrictive covenant. Defense counsel urged that the meaning of the language was clear, and it permitted birds that were household pets.
The judge admitted that he never understood how to diagram sentences, but he had looked at the language several times and concluded that a reasonable person could read the sentence as prohibiting birds, prohibiting reptiles, and prohibiting "any other animals, except dogs, cats, and other household pets." He concluded that the words "no birds" were as clear as day; birds were not permitted by this Association. He stated, "I am satisfied that no birds means no birds. Summary judgment is appropriate." He further found that "no ambiguity exists, and that birds are prohibited" under the Master Deed. The judge ordered defendants to remove the birds within forty-five days and reimburse the Association for costs and counsel fees incurred. Defendants' motion to bar the Lambert report was denied.
On October 16, 2009, the trial judge entered judgment in favor of the
Association for $37,337.91, representing fees of $24,375; costs of
$1,561.58; arbitrator's fees of $2,590.86; expert fees of $3,480.47;
and fines of $5,330 for defendants' non-compliance from April 3, 2008,
to September 18, 2009, for
which defendants were jointly and severally liable.*fn2
This appeal followed.
In reviewing a ruling on a summary-judgment motion, we apply the same standard as that governing the trial court. Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998); Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989).
"The provisions of a master deed are of paramount importance when defining the rights and obligations of condominium unit owners." Shadow Lake Vill. Condo. Ass'n v. Zampella, 238 N.J. Super. 132, 139 (App. Div. 1990) (citation omitted). In the context of "a private, single-family, residential community governed by a not-for-profit corporation [where] [r]estrictive membership covenants [are] contained in the community's master deed," Highland Lakes Country Club & Community Association v. Franzino, 186 N.J. 99, 104 (2006), our Supreme Court held that "covenant language must be construed strictly, and in favor of the owner's unrestricted use." Id. at 112 (citing Hammett v. Rosensohn, 46 N.J. Super. 527, 535 (App. Div. 1957), aff'd, 26 N.J. 415 (1958)). Nonetheless, "this rule should not be used to defeat the obvious purpose of the restriction." Shadow Lake, supra, 238 N.J. Super. at 139 (citation omitted).
A deed restriction is regarded as a contract, and its enforcement is a contract right. See Homann v. Torchinsky, 296 N.J. Super. 326, 334 (App. Div.) ("'[A] restrictive covenant is a contract.'" (citation omitted)), certif. denied, 149 N.J. 141 (1997); see also Assisted Living Assocs. of Moorestown, L.L.C. v. Moorestown Twp., 31 F. Supp. 2d 389, 397 (D.N.J. 1998) ("New Jersey adheres to the minority view which treats an equitable servitude as a contract right, not a property right." (citation and internal quotation marks omitted)); Weinstein v. Swartz, 3 N.J. 80, 86 (1949) (stating that "[a] restrictive covenant is a contract"). Therefore, because restrictive covenants are contracts, the well-established rules of contract construction apply. Homann, supra, 296 N.J. Super. at 334; see also Verna v. Links at Valleybrook Neighborhood Ass'n, 371 N.J. Super. 77, 88 (App. Div. 2004) ("[A] neighborhood scheme, like the mutual undertakings contained in the association's governing documents, is a matter of contract . . . ." (citation omitted)).
To determine whether covenant language imposes an obligation on the owner, "we turn to the language itself to see whether it expresses such intent with sufficient clarity to provide fair notice of the obligation alleged." Highland Lakes, supra, 186 N.J. at 114.
Our obligation when interpreting contractual provisions is clear. First and foremost, "fundamental canons of contract construction require that we examine the plain language of the contract and the parties' intent, as evidenced by the contract's purpose and surrounding circumstances." State Troopers Fraternal Ass'n v. New Jersey, 149 N.J. 38, 47 (1997) (citations omitted). As stated in Marchak v. Claridge Commons, Inc., "[w]hen reading a contract, our goal is to discover the intention of the parties. Generally, we consider the contractual terms, the surrounding circumstances, and the purpose of the contract." 134 N.J. 275, 282 (1993) (citations omitted). [Id. at 115-16 (alteration in original).]
"The restriction thus must be analyzed in accordance with the principles of contract interpretation, which include a determination of the intention of the parties as revealed by the language used by them." Cooper River Plaza E., LLC v. Briad Grp., 359 N.J. Super. 518, 527 (App. Div. 2003) (citing Assisted Living Assocs., supra, 31 F. Supp. 2d at 397; Homann, supra, 296 N.J. Super. at 334; Union Cnty. Indus. Park v. Union Cnty. Park Comm'n, 95 N.J. Super. 448, 452-53 (App. Div. 1967)).
However, as the cases that we have cited make clear, in the context of a deed restriction meant to bind subsequent purchasers that are strangers to the initial transaction, the intent of the restriction must manifest itself in the language of the document itself. If ambiguity remains, it cannot be resolved, as would be the case if the initial signatories disputed an ambiguous term, by resort to extrinsic evidence . . . .
An intention disguised by an ambiguity cannot bind a subsequent purchaser who, as the result of an absence of clarity in the instrument of conveyance, lacks notice of restrictions that the initial parties have attempted to place on the property being conveyed. A holding otherwise would be inconsistent with principles of contract law, which require sufficient definiteness of terms so that the performance required of each party can be ascertained with reasonable certainty, as well as knowledge of and acquiescence in the stated terms. Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992). It would also undermine the central public policy underlying New Jersey's Recording Act: that "a buyer . . . of real property should be able to discover and evaluate all of the . . . restrictions on the property" from a review of the public record. Aldrich v. Schwartz, 258 N.J. Super. 300, 307 (App. Div. 1992)[; s]ee also N.J.S.A. 46:21-1. Cf. Palamarg Realty Co. v. Rehac, 80 N.J. 446, 453 (1979) (expressing the purpose of the Recording Act and holding that title issues should be resolved so as to effectuate that purpose). [Id. at 527-28 (emphasis added)
Obviously, the evidence submitted by Lambert in his report and certification regarding his intent as the scrivener and his hearsay recollection of the intent of the Sponsor and realtor have no place in our consideration of the issue before us. See id. at 528 ("Consequently, testimony by the parties to the initial sale . . . as to their undisclosed intent in imposing the setback restriction is irrelevant to a resolution of the issues now presented."). Thus, the interpretation and construction of a deed is a matter of law subject to de novo appellate review. Ibid.; see also Kaur v. Assured Lending Corp., 405 N.J. Super. 468, 474 (App. Div. 2009).
Defendants contend that the pet restriction in paragraph 11(c) of the Master Deed unambiguously permits the keeping of two birds as household pets under the exception to the prohibition on birds, reptiles, and any other animal. Paragraph 11(c) of the Master Deed provides that "[n]o bird, reptile, or animal of any kind shall be raised, bred, or kept in any Unit . . . except that dogs, cats or other household pets are permitted, not to exceed two in the aggregate."
A term is ambiguous if reasonably susceptible to at least two meanings. M.J. Paquet, Inc. v. N.J. Dep't of Transp., 171 N.J. 378, 396 (2002) (citation omitted). Here, the restrictive covenant is readily susceptible to defendants' interpretation.
The subjects of the prohibition are "birds, reptiles, and animals of any kind." These are broad and sweeping classes and kingdoms of living things. The subjects of the prohibition shall not "be raised, bred, or kept in any Unit." The prohibition is a complete independent clause, a thought unto itself. Then we have the exception for "dogs, cats or other household pets." The exception can readily be considered as an exception to the prohibition, that is, to the entirety of the independent clause, not just the third subject of the prohibition, "animal of any kind." Indeed, applying the exception only to "animal of any kind" is a very strained construction of the language as the exception follows the entire independent clause, not just "animal of any kind."
We must construe the covenant language strictly "in favor of the owner's unrestricted use." Highland Lakes, supra, 186 N.J. at 112 (citation omitted). We must determine whether the language expresses the intent of the grantor "with sufficient clarity to provide fair notice of the obligation alleged." Id. at 114. However, "the intent of the restriction must manifest itself in the language of the document omitted). The language must be evaluated from the perspective of a buyer of a condominium unit. See ibid.
These principles of law compel us to conclude that the only limitation on the keeping of pets is that the pet be a dog, a cat, or other household pet as that term is commonly understood. Pursuant to Division of Fish and Wildlife regulations, exotic, endangered, or dangerous species of birds, reptiles, and animals are either prohibited from being kept as pets or require a permit to possess as pets. N.J.A.C. 7:25-4.1 to 4.20. Under these regulations, the birds, reptiles, or animals that a person may lawfully keep in his or her residential home are domesticated, household pets. See N.J.A.C. 7:25-4.3 (allowing an African grey parrot to be kept as a pet with a permit). These regulatory provisions make it abundantly clear that Polly and Kelvin are household pets that may be kept in defendants' condominium unit.
After carefully reviewing the record in the light of the written arguments advanced by the parties, we conclude that the remaining issues presented by defendants are without sufficient merit to warrant discussion in this opinion, R. 2:11-3(e)(1)(E).