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City of Jersey City, A Municipal Corporation of the State of New Jersey v. Liberty Storage

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


January 20, 2011

CITY OF JERSEY CITY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF,
v.
LIBERTY STORAGE, LLC, A NEW JERSEY LIMITED LIABILITY COMPANY, DEFENDANT-RESPONDENT, AND STERLING CAPITAL, LLC, A NEW JERSEY LIMITED LIABILITY COMPANY,
METRO REALTY CORP., A NEW JERSEY CORPORATION, NVE BANK, LAKELAND BANK, GORTEX CAPITAL, LLC, A NEW JERSEY LIMITED LIABILITY COMPANY,
PRIVATE CAPITAL SERVICES, LLC A NEW JERSEY LIMITED LIABILITY COMPANY, G.X.R. AUTO BODY CORP., A NEW JERSEY CORPORATION,
GREENBERG PROPERTY, LLC, A NEW JERSEY LIMITED LIABILITY COMPANY,
ARNOLD G. SHURKIN; NACIREMA ENVIRONMENTAL SERVICES COMPANY, INC.,
CBS OUTDOOR, INC., A DELAWARE CORPORATION,
STATE OF NEW JERSEY, JERSEY CITY MUNICIPAL UTILITIES AUTHORITY,
A BODY CORPORATE AND POLITIC OF THE STATE OF NEW JERSEY AND
JOHNSON ELECTRIC, INC., A NEW JERSEY CORPORATION, DEFENDANTS.
IMPACT REALTY ASSOCIATES, INC., APPELLANT.

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5422-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 14, 2010

Before Judges Graves and Messano.

Impact Realty (Impact) appeals from the denial of its motion to intervene in a condemnation action brought by the City of Jersey City (the City) against numerous defendants, including Liberty Storage LLC and Sterling Capital LLC (collectively, Liberty).*fn1 Impact contends that it satisfied the requirements of Rule 4:33-1 (Intervention as of Right), or, alternatively, that the Law Division judge mistakenly exercised his discretion pursuant to Rule 4:33-2 (Permissive Intervention) by denying its motion. We have considered the arguments raised in light of the record and applicable legal standards. We affirm.

For purposes of this appeal, we accept the allegations contained in the certifications supporting Impact's motion to intervene and the pleading that accompanied it. Impact is a licensed real estate broker; Liberty owns certain property in Jersey City designated as Block 1510, Lots 0000X, 0000Y, and 00029 (the property).*fn2 Impact and Liberty entered into an "Open Listing Realty Agreement" (the agreement) in September 2008.*fn3

Pursuant to its terms, Liberty agreed to pay Impact 5% of "the sale price should [Impact] find a purchaser ready, willing and able to pay for the property or such other sum as may be accepted by" Liberty. The agreement specifically provided that Impact was authorized "to submit and pursue the interests of [the City] to consider purchasing the . . . property," and it also contained a non-exclusivity clause that permitted Liberty to find its own purchaser and list the property with other brokers.

In his certification supporting the motion to intervene, Robert Pimienta, Impact's president, alleged that Liberty knew his company "had a working business relationship with [the City]," and that Impact "secured [the City] as a ready, willing purchaser able to pay for the property." Pimienta further alleged that Impact "work[ed] vigorously" to obtain environmental information and "to resolve other issues in order to consummate a deal between" Liberty and the City.

In December 2008, the City's outside counsel advised Liberty of the municipality's "consideration [of the property] for acquisition" under the Eminent Domain Act (the EDA), N.J.S.A. 20:3-1 to -50. Pimienta objected to Liberty's "scheme to attempt to avoid paying Impact its commission on the transaction." However, apparently in April 2009, Liberty offered to sell the property to the City for $24,125,000. Attached to Impact's counsel's certification was a letter from Liberty's attorney to the City's corporation counsel setting forth the purchase price and additional terms.

Pimienta further alleged that Impact demanded its commission but Liberty refused to pay. The motion to intervene was accompanied by a proposed pleading in which Impact asserted claims of breach of contract, breach of the covenant of good faith and fair dealing, quantum meruit, unjust enrichment, and fraud against Liberty.

It suffices to say that Liberty's opposing certification took issue with Pimienta's characterization of the facts. Liberty noted that "[d]espite . . . extended negotiations, [the City] would not agree to [its] terms of sale." We note that there were indeed significant details that the parties attempted to negotiate other than the purchase price, including the costs of environmental remediation, satisfaction of existing mortgages and relocation costs, among other things. In his reply certification, Pimienta emphasized his active involvement in negotiating these issues, and Liberty's attempts to reduce any commission due to Impact throughout the negotiations.

On October 30, 2009, the City filed a declaration of taking for the property alleging that "just compensation" based upon appraisals was $19,167,000.*fn4 See N.J.S.A. 20:3-17. On January 5, 2010, the Law Division judge entered an order vesting the City with title to the property pursuant to the EDA effective January 31, 2010.

On April 30, 2010, the judge denied Impact's motion to intervene. As stated in his hand-written notes on the order, the judge determined:

Impact . . . seeks to recover a real estate commission from the defendant Liberty[/Sterling]. Such a claim is not germane to the condemnation action and can/should be brought in a separate complaint alleging this discrete cause of action. This is not a ruling on the merits as to the substantive claim of Impact.

This appeal ensued.

We were advised at oral argument that Impact indeed filed a complaint against Liberty in the Law Division seeking its alleged commission, and that the litigation is in the discovery period. We were further advised that Liberty has appealed from the report of the commissioners in the condemnation action, Rule 4:73-6(a), and that the matter is proceeding to trial.

Rule 4:33-1 provides:

Upon timely application anyone shall be permitted to intervene in an action if the applicant claims an interest relating to the property or transaction which is the subject of the action and is so situated that the disposition of the action may as a practical matter impair or impede the ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

We have said the Rule establishes the four criteria for determining intervention as of right: The applicant must (1) make a timely application; (2) claim an interest relating to the property or transaction which is the subject of the action; (3) show it is so situated that disposition of the action may as a practical matter impair or impede the ability to protect that interest; and (4) demonstrate its interest is not adequately represented by existing parties. [City of Asbury Park v. Asbury Park Towers, 388 N.J. Super. 1, 7 n.4 (App. Div. 2006).]

"We have construed this rule liberally" and "[a]s the rule is not discretionary, a court must approve an application for intervention as of right if the four criteria are satisfied." Meehan v. K.D. Partners, L.P., 317 N.J. Super. 563, 568 (App. Div. 1998) (citations omitted).

Impact contends that contrary to the judge's determination that its pleading was not "germane" to the condemnation action, it should have been permitted to intervene as of right because its claim is based upon "an interest relating to the property or transaction which is the subject of the action." Liberty argues that Impact has "no lien, equitable or otherwise" on the property because it has no legitimate claim to a commission since the property was condemned by the City. Thus, Impact had no right to intervene under Rule 4:33-1. Liberty likens Impact's attempt, in this regard, to "prejudgment attachment of the condemnation proceeds to 'secure' its unliquidated . . . claim for a commission." See R. 4:60-1.

Impact's claim for a commission rests in part upon its allegation that it was denied its earned commission by Liberty's wrongful conduct, i.e., Liberty's decision to forego a sale and "move forward with a condemnation by the City." See e.g., Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 551 (1967) (holding that "if the failure of completion of the contract results from the wrongful act or interference of the seller, the broker's claim is valid and must be paid"). Since a commission is usually due at closing, id. at 552, Impact claims it has an "interest relating to the property or transaction which is the subject" of the condemnation action, and thus, it should be able to participate in the condemnation action as of right, and recover its commission out of any proceeds payable to Liberty.

We need not examine the likely merits of Impact's claim for a commission in order to decide whether it possessed the right to intervene pursuant to Rule 4:33-1. Impact has failed to demonstrate in any way that "it is so situated that the disposition of the [condemnation] action may as a practical matter impair or impede the ability to protect [its] interest." Impact has not alleged that there would be insufficient proceeds from the condemnation action or other assets to satisfy any judgment if indeed it prevailed on its commission claim. Thus, we agree with the result reached by the motion judge denying the motion to intervene as of right.

Alternatively, Impact argues that even if it were not entitled to intervene as of right, the judge mistakenly exercised his discretion by denying its motion under Rule 4:33-2. That Rule provides: Upon timely application anyone may be permitted to intervene in an action if the claim or defense and the main action have a question of law or fact in common. . . . In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

Liberty counters that permissive intervention was properly denied because Impact's commission claim shared no commonality with the condemnation action and would delay that proceeding.

We find no mistaken exercise of the judge's discretion to deny Impact's permissive intervention in the condemnation action. While the actual amount of Impact's commission claim relates to the ultimate price paid for the property, we do not believe that such a peripheral connection satisfies the requirement of Rule 4:33-2's that the "claim . . . and the main action have a question of law or fact in common."

The eminent domain action concerns only one issue --setting a "'just compensation' for the property obtained, which is defined as 'the fair market value of the property as of the date of the taking, determined by what a willing buyer and a willing seller would agree to, neither being under any compulsion to act.'" Asbury Park, supra, 388 N.J. Super. at 9 (quoting State v. Silver, 92 N.J. 507, 513 (1983)). Undoubtedly, Impact's intervention would delay the condemnation proceeding because it would require litigating the factual complexities of Liberty's relationship with Impact. In short, those issues have nothing to do with adjudicating the fair market value of the property as determined by the procedures set forth in the EDA.

Moreover, if Impact was permitted to intervene, the extent of its participation in the condemnation action is subject to some speculation and assuredly would interfere with the trial court's ability to control the limited issues presented by the condemnation appeal. In Asbury Park, supra, 388 N.J. Super. at 14, we affirmed the denial of intervention in a condemnation action to the municipality's designated redeveloper. Among other things, we noted the difficulty managing the litigation if intervention were permitted, and the proposed intervenor's "ability to reject a settlement and . . . withhold consent to a stipulation of dismissal of the condemnation action." Id. at 13. Refusing to permit Impact to intervene in the condemnation action pursuant to Rule 4:33-2 was not a mistaken exercise of the judge's discretion.

Affirmed.


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