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Kenneth F. Nisch and Joan Carol Nisch, Frank Xavier, and Frank Vodraska v. Ocean Beach & Yacht Club


March 22, 2011


On appeal from Superior Court of New Jersey, Chancery Division, Ocean County, Docket Nos. C-224-08 and C-226-08.

Per curiam.


Argued November 30, 2010

Before Judges Messano and Waugh.

These related appeals concern the Ocean Beach and Yacht Club (Club), which is the homeowners association of a beach community, also known as Ocean Beach Unit II (Ocean Beach), comprising approximately 490 homes in Ocean County.*fn1 Lot sizes range from 1500 to over 5000 square feet. All residents are required to be members of the Club, which has authority to regulate certain aspects of building construction, renovation, and maintenance in the community. The appeals focus on the extent and exercise of that authority.


We discern the following factual and procedural background from the record.

Ocean Beach was created in the late 1940s through the filing of a map and building restrictions by Ocean Beach Company (OBC), the developer. The restrictions allowed OBC and the Club to adopt rules and regulations concerning improvements, and to review and approve proposed improvements consistent with duly established standards. At that time, there was no restriction on the number of stories permitted. Eight two-story houses were subsequently constructed.

In 1964, OBC filed another map with restrictions to create additional sections in Ocean Beach. One of those areas is known as the Melody Lane Extension. In connection with the 1964 filing, the new area was specifically restricted to single-story houses. Eventually, OBC and the Club applied the single-story restriction to the entire community.

The revised rules and regulations allow the owners of existing two-story homes to rebuild or remodel, as long as they do not exceed "the minimum height required by governmental codes or their present height, whichever is greater, when measured from the finished grade level to the top of the structure." Club Rule 9D.

Timothy and Cynthia McKinney (McKinneys)*fn2 own property on Melody Lane, which is located in the Township of Toms River and, as the name suggests, is part of the Melody Lane Extension. They began construction of a house that was not consistent with the applicable restrictions as to setback, height, and number of stories. However, the Club had previously approved their proposed plans in error. The Club then sought to revoke its approval.

The McKinneys and the Club filed lawsuits against each other in January 2008. The McKinneys filed an action in the Law Division, seeking damages for violation of their membership rights. At approximately the same time, the Club filed suit in the Chancery Division, seeking an order compelling the McKinneys to comply with the applicable restrictions. The two actions were consolidated in the Chancery Division.

The consolidated action was settled in June 2008. The terms of the settlement were embodied in a stipulation of settlement. For the purposes of this appeal, the relevant provisions of the stipulation are as follows:

WHEREAS the parties all recognize and accept the validity, applicability and enforceability of the Rules and Regulations of the OBYC as they exist on this date;

WHEREAS, an Agreement has been reached . . .

1) The Plaintiffs will re-record the Deed to their home which Deed shall contain the following restriction:

a. Based on the restrictions and regulations applicable in the Ocean Beach and Yacht Club at the time of the filing of this Deed, the house shall have no more than one habitable floor of living space. The second floor area shall not be used as living space. This restriction shall remain in effect in perpetuity or until such time as the restrictions or regulations of the Ocean Beach Yacht Club are revised to allow more than one floor of living area or other wise modified by judicial act.

2) The Plaintiffs will remove the spiral staircase to the roof deck, the rails and the posts between September 15 and October 15, 2008. Plaintiffs may install a maximum one foot high rail with possible decorative caps.

3) Except for pre-existing, two-story houses that may rebuild [of] their pre-existing height consistent with the rules and regulations, if the height limitation under the rules and regulations of the OBYC is increased, Plaintiffs may apply to the Board to restore the rails and stairs.

4) If the OBYC Board approves or permits construction in violation of the height restrictions, Plaintiffs may apply for similar approval and if denied, seek judicial review based on selective enforcement or any other appropriate basis.

5) The Defendants will immediately restore the Plaintiffs and their family members as members in good standing of the Ocean Beach & Yacht Club entitled to the use and benefits of all of the facilities of the Ocean Beach & Yacht Club as would any other member in good standing.

6) The parties acknowledge that notwithstanding the existing deviations of the Plaintiffs' home from the Rules and Regulations of the OBYC, the Defendants will treat the Plaintiffs' home as if it is in full compliance with the Rules and Regulations of the OBYC for all purposes.

At approximately the same time as the McKinney dispute was taking place, a dispute arose with respect to the property owned by Rudolph and Mary Anne Chiti on Harbor Drive in Toms River. The Chitis' lot was one of the largest in Ocean Beach and had one of the pre-existing two-story houses. They sought and received permission to construct a new house. Although their existing house was twenty-five feet high, their plans called for a height of twenty-eight feet, which the Chitis claimed was necessary to comply with regulations issued by the Federal Emergency Management Act (FEMA).

At that point, the McKinneys took the position that the Club had engaged in selective enforcement because the Chitis were being permitted to build their new house higher than rules permit. For that reason, the McKinneys refused to remove the stairs and railing related to the deck built on the top of their house as required by the settlement agreement. The Club advised the Chitis that it had approved their plans in error and that they could not build their new house higher than twenty-five feet. The Chitis refused to change their plans.

The Club then commenced an action against the Chitis and the McKinneys in the Chancery Division (Chiti litigation),*fn3 seeking a declaration of the parties' rights and to preserve the status quo. In connection with the Chiti litigation, the Club retained a licensed professional engineer to review the Chitis' plans. The engineer prepared a report stating his determination that the proposed building needed to be twenty-eight feet high to comply with FEMA regulations. The Chitis' architect took the same position. As a result, the General Equity judge declined to block the Chitis from continuing the construction of their house while the litigation was pending. The Chitis subsequently moved for summary judgment and the judge dismissed the complaint as to the Chitis, without opposition by the Club. The McKinneys subsequently applied to the Club for permission to retain the stairs and railing. Their request was denied.

While the Chiti action was taking place, Kenneth F. Nisch and several other property owners filed a declaratory action against the Club (Nisch litigation), challenging the building restrictions. Although neither the McKinneys nor the Chitis were originally parties to the Nisch litigation, one aspect of their dispute was eventually joined to the Nisch litigation.*fn4

The McKinneys moved to dismiss the Chiti litigation as to them, arguing that the Club's building restrictions were unconstitutional and a usurpation of municipal zoning authority. The judge denied their motion on March 6, 2009, holding that there was no constitutional infirmity with respect to the Club's building restrictions. At the same time, the judge transferred the remaining McKinney issues, i.e., whether the McKinneys had to remove the stairs and the railings, from the Chiti litigation to the Nisch litigation. The order specifically provided that the portion of the order dismissing the McKinneys' challenge to the validity of the Club's building restrictions would not become final for the purposes of appeal until the remaining issues were resolved in the Nisch litigation.

On October 16, 2009, the McKinneys filed a motion seeking a declaration permitting them to retain the stairs and railing because the Club had engaged in selective enforcement with respect to the Chitis. On November 11, 2009, the Club filed a cross-motion in aid of litigants' rights, seeking to enforce the provision of the stipulation of settlement requiring the removal of the stairs and railings.

Following oral argument on November 20, 2009, the judge denied the McKinneys' motion and granted the Club's cross-motion. The judge determined that the Club did not engage in selective enforcement when it permitted the Chitis to proceed with the construction of their house in light of the opinions of the engineer and the architect that a height of twenty-eight feet was required for compliance with FEMA regulations. In an amended implementing order filed on December 3, 2009, the judge ordered removal of the stairs and railings within thirty days. However, the order stayed that requirement pending appeal.

The Nisch litigation itself was dismissed by order dated December 4, 2009, the judge having concluded the Club was not estopped from enforcing the building restrictions. The final dismissal of the Nisch litigation caused the orders entered on March 6, 2009, in the Chiti litigation, and December 3, 2009, in the McKinney-aspect of the Nisch litigation, to become final. These appeals followed.


In A-1832-09T2, the McKinneys appeal the December 3, 2009 order determining that the Club did not engage in selective enforcement and, consequently, was entitled to enforce the stipulation of settlement with respect to the removal of the stairs and railing.*fn5 They argue that the judge erred in determining that the Chitis did not violate the height restriction regulation in Ocean Beach.

The issue on this aspect of the appeal is not, as the McKinneys argue, whether the extra three feet in the height of the Chitis' house violates Club Rule 9D, but whether the Club engaged in selective enforcement in allowing the Chitis to build the house to that height. The stipulation of settlement provides that, if another owner is permitted to build in violation of the height restrictions and the McKinneys are denied similar permission, the McKinneys may "seek judicial review based on selective enforcement."

Because the issue was decided on summary judgment and there were conflicting expert opinions in the record at that time as to whether the Chitis could have built a two-story house at or below the twenty-five feet of their existing house, we must assume that it would have been possible to do so. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (A 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.").

We apply the same standard for selective enforcement as we have applied to allegations of selective enforcement in the zoning context.

The fact that other entities have obtained approval of similar licenses or permits in similar circumstances does not by itself support a finding of selective enforcement. Butler Oak Tavern v. Division of Alcoholic Beverage Control, 20 N.J. 373, 382 (1956). "The mere fact that a law has not been fully enforced against others does not give a defendant the right to violate it." State v. Boncelet, 107 N.J. Super. 444, 453 (App. Div. 1969). The party asserting selective enforcement has a "heavy" burden of proof. State v. DiFrisco, 118 N.J. 253, 266 (1990). [Twp. of Saddle Brook v. A.B. Family Ctr., Inc., 307 N.J. Super. 16, 23-24 (App. Div. 1998), judgment aff'd and remanded, 156 N.J. 587 (1999).]

See also United Prop. Owners Ass'n of Belmar v. Borough of Belmar, 343 N.J. Super. 1, 25 (App. Div.) ("Two elements must be established to succeed on a claim of unconstitutional enforcement of an ordinance--a discriminatory effect and a motivating discriminatory purpose.") (citation and internal quotation marks omitted), certif. denied, 170 N.J. 390 (2001).

There is nothing in the record before us to suggest that the Club had a discriminatory animus against the McKinneys as opposed to the Chitis. Both had engaged in litigation against the Club. Both claimed that they were initially told that their plans were approved and that the Club then rescinded the approval. Both were ultimately allowed to build houses that arguably did not conform to the building restrictions applicable in Ocean Beach. Although the McKinneys' settlement agreement required them to remove the stairs and railing so that the deck on the roof could not be used, other deviations from the applicable building requirements were permitted to remain as part of the settlement.

In addition, the nature of the alleged deviations are significantly different. The McKinneys' house, which should have been no more than nineteen feet above grade, was built with a higher roof and a roof deck on top. The top of the roof is 22.23 feet above grade without the roof deck, and 25.49 feet above grade at the top of the deck railings. As part of the settlement, the McKinneys agreed to remove the staircase leading to the roof deck and to replace the railings with shorter, decorative railings. They were not required to reconstruct the house to lower the roof to the nineteen-foot level.

The top of the roof of the Chitis' house is twenty-eight feet above grade. Although the McKinneys' expert eventually submitted an expert report contending that the top of the roof could have been twenty-five feet or less above grade if a flatter roof configuration had been used, they had not done so as of the time the Chitis moved for summary judgment. The Club accepted the opinions of its engineering expert and the Chitis' architect, who agreed that the twenty-eight foot height was required to comply with FEMA regulations. For that reason, they chose not to oppose the Chitis' motion for summary judgment.

Thus, both the McKinneys and the Chitis were ultimately permitted to retain structures above the height restrictions applicable to their respective circumstances. What the McKinneys were not allowed to do was retain a deck on top of their roof with a spiral staircase leading to it. We agree with the motion judge that the Club's decision in that regard was neither unreasonable nor an exercise of selective enforcement, given the very different aesthetic considerations applicable to roof height, on one hand, and an active roof deck on top of a house that was already too high, on the other.

In our view, the McKinneys failed to make out a prima facie case of selective enforcement. Consequently, we affirm the order on appeal in A-1832-09T2.


In A-2104-09T2, the McKinneys appeal the March 6, 2009 order to the extent it determined that there was no constitutional infirmity with respect to the Club's building restrictions. They argue that the judge erred in determining that the Club's building restrictions interfered with their right to privacy under the New Jersey Constitution and also improperly sought to preempt the zoning ordinances applicable to property in the Township of Toms River.

The record on appeal does not contain a written or oral opinion in connection with the March 6 order. The notice of appeal states that there was no verbatim record, and the order itself contains no reference to a written or oral opinion. See R. 1:7-4(a) and R. 4:46-2(c), both of which require findings of fact and conclusions of law.

Our review of the judge's decision would, in any event, be plenary. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). In addition, we review judgments, not decisions, and may affirm on any ground. Serrano v. Serrano, 367 N.J. Super. 450, 461 (App. Div. 2004) ("Although we affirm for different reasons, a judgment will be affirmed on appeal if it is correct, even though 'it was predicated upon an incorrect basis.'") (quoting Isko v. Planning Bd. of Livingston Twp., 51 N.J. 162, 175 (1968)), rev'd on other grounds, 183 N.J. 508 (2005).

Having carefully reviewed the record and legal arguments, we see no merit to the McKinneys' contentions, which do not warrant extended discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only the following observations.

We note that the stipulation of settlement in the original consolidated action between the McKinneys and the Club provided that "the parties all recognize and accept the validity, applicability and enforceability of the Rules and Regulations of the OBYC as they exist [at the time of the settlement]." As a result, it would appear that the McKinneys were precluded by res judicata from challenging their validity in a subsequent action. Res judicata bars repetitive litigation when there has been a final judgment by a court of competent jurisdiction and the causes of action, issues, parties, and relief sought are substantially similar. Culver v. Ins. Co. of N. Am., 115 N.J. 451, 460 (1989). See also R. 4:30A, which embodies the entire controversy doctrine, a preclusionary device, intended to prevent fractionalized litigation by insisting that a party assert all claims arising from a single controversy in a single action. Prevratil v. Mohr, 145 N.J. 180, 190 (1996).

Nevertheless, we also comment on the merits. The McKinneys' reliance on Committee for a Better Twin Rivers v. Twin Rivers Homeowners' Association, 192 N.J. 344 (2007) is misplaced. That case involved free speech rights guaranteed by Article I, Paragraph 6 of the Constitution of New Jersey (1947), as well as the free association rights guaranteed by Article I, Paragraph 18. No such rights are at issue here.

The McKinneys have cited no case applying the property rights guaranteed by Article I, Paragraph 1 of the Constitution to building restrictions in a common interest community. Even if there were some application of that constitutional provision in the current context, it is well established that "neither diminution of land value itself nor impairment of the marketability of land alone constitutes a taking." Pheasant Bridge Corp. v. Twp. of Warren, 169 N.J. 282, 298 (2001), cert. denied, 535 U.S. 1077, 122 S. Ct. 1959, 152 L. Ed. 2d 1020 (2002). The McKinneys continue to reside in their house, which is still marketable.

We are equally unpersuaded by the McKinneys' argument with respect to zoning preemption. They argue that the Club's building restrictions are invalid because the Legislature has delegated zoning power exclusively to municipalities through the Municipal Land Use Law (MLUL), N.J.S.A. 40:55D-1 to -92. This is essentially a preemption argument. The McKinneys have cited no cases that support their argument that the MLUL preempts the entire field of restrictive covenants in common interest communities.

The McKinneys' citation of Gunthner v. Planning Bd. of Bay Head, 335 N.J. Super. 452 (Law Div. 2000) is inapposite. That case holds that a municipality may not delegate its zoning authority to any organization other than as authorized by statute. Id. at 461. There is no claim in this case that the Club had been delegated zoning authority by the Township of Toms River. It is, instead, exercising authority contained in its foundational documents and adopted through the powers conferred by those documents. Ultimately, it is exercising authority delegated to it by OBC in the initial filings and subsequently through the adoption of bylaws, rules, and regulations. As already noted, the McKinneys have previously "recognize[d] and accept[ed] the validity, applicability and enforceability of the [Club's] Rules and Regulations." Consequently, we affirm the order on appeal in A-2104-09T2.


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