May 3, 2011
JOHN FIGA AND BEVERLY FIGA, PLAINTIFFS-APPELLANTS,
RARITAN TOWNSHIP PLANNING BOARD AND HI-GEAR DEVELOPERS, INC., DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Hunterdon County, Docket No. L-281-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 19, 2011
Before Judges Wefing, Baxter and Koblitz.
Plaintiffs filed a two-count complaint in lieu of prerogative writs challenging the decision of defendant Raritan Township Planning Board ("Board") denying a subdivision application and seeking indemnification from defendant Hi-Gear Developers, Inc. ("Hi-Gear") for the counsel fees plaintiffs incurred in connection with this prerogative writ action. The trial court denied plaintiffs' request for indemnification and dismissed the challenge to the decision of the Board, concluding that plaintiffs lacked standing to raise the issue. After reviewing the record in light of the contentions advanced on appeal, we affirm.
Plaintiffs owned a six-acre parcel of land that abutted a forty-nine acre parcel owned by Hi-Gear. Both were located in the township's R-3 zone. Plaintiffs knew that Hi-Gear wanted to develop its land, and they approached Hi-Gear with the proposal that it purchase a portion of their land and submit a development proposal to the Board that encompassed both lots. Hi-Gear agreed and, without the assistance of attorneys, the parties prepared a contract, which they executed on March 20, 2007. Under the contract, Hi-Gear agreed to "pay all expenses required to gain approval and develop a subdivision" and to pay plaintiffs $450,000 for a portion of their land, "to be used for creating lots" for the proposed subdivision. Hi-Gear's obligation to purchase this land was contingent upon it "obtaining approval to create three lots on the land proposed by the Development." Further, Hi-Gear agreed that it would "hold [plaintiffs] harmless in the event that the Subdivision is rejected" and recognized that plaintiffs were "not obligated financially or legally" to the development.
In mid-April 2007, a subdivision application was submitted to the Board spanning the two parcels. The first Board hearing occurred in July 2007; eleven hearings in all were held, concluding in June 2008. During that process, the subdivision plan was modified on a number of occasions in an attempt to meet the objections interposed by surrounding property owners, many of which dealt with issues of drainage and wetlands delineation. In its final form, Hi-Gear proposed to build a total of twenty-four single-family homes. In April 2008, the Board voted to deny the application in light of the fact that Hi-Gear had been unable to produce a letter from New Jersey American Water Co. that it could supply water to the proposed development.
In May 2008, the Board permitted Hi-Gear to re-open its application, and in June Hi-Gear presented to the Board the requested confirmation from the water company. The Board nonetheless again voted to deny the application, citing concerns about the lack of an active recreation area, water runoff problems experienced in the neighborhood, and concerns about the preservation of mature trees. When Hi-Gear elected not to seek judicial relief from this denial, plaintiffs filed the two-count complaint to which we referred at the outset. Neither of the orders that plaintiffs challenge on appeal deal with the substantive merits of their charge that the Board acted arbitrarily, capriciously and unreasonably when it denied this application. We are thus not called upon in this appeal to deal with the legal merits of the Board's ultimate decision to deny this application.
After defendants filed their answers to this complaint, the trial court held a case management conference to structure the litigation. It directed that the initial question to be addressed was the second count of plaintiffs' complaint, which sought to have Hi-Gear held responsible to pay their counsel fees. This, the trial court held, was to be decided on cross-motions for summary judgment.
Plaintiffs argue on appeal both that the trial court's direction that the counsel fee issued be decided first was incorrect and that the trial court's decision on the merits of that issue was also incorrect. We disagree with plaintiffs with respect to both contentions.
There is a facial appeal to plaintiffs' contention that the trial court should have withheld dealing with the issue of counsel fees until it addressed the first count of their complaint. Particularly in the context of this matter, however, we can see no error in the trial court's approach. We note initially that Rule 4:69-4, dealing with the management of actions in lieu of prerogative writs, specifically directs the managing judge to establish a briefing schedule. In our judgment, it is in the inherent power of such a managing judge to direct the order in which issues shall be addressed. Casino Reinvestment Dev. Auth. v. Lustgarten, 332 N.J. Super. 472, 488 (App. Div. 2000) (recognizing that "[t]he right of a trial court to manage the orderly progression of cases before it has been recognized as inherent in its function"). The decision to proceed in this fashion was essentially a discretionary determination, and we can see no abuse of the trial court's discretion in this regard.
Turning to the court's analysis of the underlying merits of the question, we are satisfied that the trial court was correct in that regard as well. We reject plaintiffs' contention that the contractual language obligating Hi-Gear to "pay all expenses required to gain approval and develop" the subdivision also obligated it to incur counsel fees to pursue litigation once the initial application was denied.
Certain basic principles guide our review of this issue on contract interpretation. It is settled that "[w]ords and phrases are not to be isolated but related to the context and the contractual scheme as a whole, and given the meaning that comports with the probable intent and purpose." Republic Bus. Credit Corp. v. Camhe-Marcille, 381 N.J. Super. 563, 569 (App. Div. 2005) (quoting Newark Publishers' Ass'n v. Newark Typographical Union, 22 N.J. 419, 426 (1956)). The contract, moreover, "must be read as a whole, in 'accord with justice and common sense.'" Cumberland Cnty. Improvement Auth. v. GSP Recycling Co., 358 N.J. Super. 484, 497 (App. Div. 2003) (quoting Krosnowski v. Krosnowski & Garford Trucking, Inc., 22 N.J. 376, 387 (1956)).
In the quest for the common intention of the parties to a contract the court must consider the relations of the parties, the attendant circumstances, and the objects they were trying to attain. An agreement must be construed in the context of the circumstances under which it was entered into and it must be accorded a rational meaning in keeping with the express general purpose. [Tessmar v. Grosner, 23 N.J. 193, 201 (1957).]
Here, viewing this contract as a whole, we agree with the trial court that the parties addressed nothing further than their respective obligations in connection with the initial application to the Board for approval. The contract dealt with the consequences of the Board rejecting the application. It clearly stated that "[i]n the event the Subdivision is rejected by the Township of Raritan, all land currently in ownership of Seller will remain in the ownership of the Sellers and clear of any and all Financial or Municipal obligations." The trial court correctly observed that if the parties had intended that Hi-Gear was obligated to pursue the matter beyond the Board, this provision would have reflected that intent by including, after the reference to the Township of Raritan, a further reference to the exhaustion of the right of appeal. The absence of such language speaks volumes. Further, we agree with the trial court that it was most unlikely that Hi-Gear intended to assume an open-ended obligation to pursue judicial remedies in the absence of a clear statement to that effect. We are satisfied that if we were to construe this contract in such a fashion, we would be giving plaintiffs a better contract than they negotiated for themselves; this we may not do. Schor v. FMS Fin. Corp., 357 N.J. Super. 185, 192 (App. Div. 2002).
We turn now to plaintiffs' contention that the trial court erred when it dismissed the first count of their complaint, finding that they did not have sufficient standing to challenge the Board's decision.
Standing refers to a plaintiff's ability to initiate and maintain an action before the court. Stubaus v. Whitman, 339 N.J. Super. 38, 47 (App. Div. 2001), certif. denied, 171 N.J. 442 (2002) (holding that taxpayers and school districts lacked standing to challenge the constitutionality of the Comprehensive Education Improvement and Financing Act, N.J.S.A. 18A:7F-1 to -36). If a plaintiff does not have sufficient legal standing, a court will not entertain the matter. Ibid. In general, "standing requires that a litigant have a sufficient stake and real adverseness with respect to the subject matter of the litigation, and a substantial likelihood that some harm will fall upon it in the event of an unfavorable decision." Neu v. Planning Bd. of Twp. of Union, 352 N.J. Super. 544, 552 (App. Div. 2002) (quoting In re N.J. Bd. of Pub. Utils., 200 N.J. Super. 554, 556 (App. Div. 1985) (recognizing that owners of property in close proximity to a major development had standing to challenge certain aspects of its approval)); accord Jen Elec., Inc. v. Cty. of Essex, 197 N.J. 627, 646 (2009) (holding that a potential supplier has standing to challenge bid specifications in a public contract). Thus, a plaintiff must have an interest in the outcome of the litigation and while a financial interest is ordinarily sufficient to confer standing, see Spinnaker Condo. Corp. v. Zoning Bd. of the City of Sea Isle City, 357 N.J. Super. 105, 111 (App. Div.), certif. denied, 176 N.J. 280 (2003) (citation omitted), it is not conclusive.
Although New Jersey courts have set a "fairly low threshold" for standing and liberally interpret its requirements, a plaintiff generally "does not have standing to assert the rights of a third party." Id. at 110-11 (citations omitted); see also Stubaus, supra, 339 N.J. Super. at 47-48 (citation omitted). Courts "will not render advisory opinions or function in the abstract nor will [they] entertain proceedings by plaintiffs who are 'mere intermeddlers' or are merely interlopers or strangers to the dispute." Stubaus, supra, 339 N.J. Super. at 48 (quoting Crescent Pk. Tenants Ass'n v. Realty Equities Corp., 58 N.J. 98, 107 (1971)).
Whether a party has standing to pursue a legal remedy is a question of law; accordingly, our review of the trial court's determination is plenary. Manalapan Realty, L.P. v. Twp. Comm. of the Twp. of Manalapan, 140 N.J. 366, 378 (1995).
The trial court relied upon our decision in Spinnaker, supra, in concluding that plaintiffs lacked standing in this matter. There, the plaintiff, Spinnaker Condominium Corporation ("Spinnaker"), leased roof space to Sprint, a wireless telecommunications company, so that it could install nine antennae and related equipment needed to improve its service in the area. 357 N.J. Super. at 109. To do so, however, Sprint needed a conditional-use variance from the zoning board, and its application was denied. Ibid. Sprint thereafter found a new location for its antennae and decided not to appeal the decision of the zoning board and terminated its lease with the plaintiff. Id. at 108. Spinnaker, nonetheless, filed a prerogative writs action challenging the board's denial. Ibid. The trial court determined that Spinnaker lacked standing, and we agreed, since Spinnaker did not suffer a "substantial likelihood of some harm" from the board's denial. Id. at 111. After all, Spinnaker was not a wireless telecommunications provider and had no right on its own to install or operate such equipment on its roof. Ibid. Since Sprint decided not to appeal and terminated its lease, Spinnaker had no financial interest in the outcome of the litigation. Ibid.
Spinnaker argued, however, that its standing derived from its status as a "developer" under the Municipal Land Use Law ("MLUL"), N.J.S.A. 40:55D-1 to -136, which gives it the ability to apply to the board for "development" approvals such as use variances. Ibid.; see also N.J.S.A. 40:55D-3.*fn1 The MLUL defines a "developer" as "the legal or beneficial owner...of any land proposed to be included in a proposed development." N.J.S.A. 40:55D-4. As "legal owner" of the land, Spinnaker claimed, it would benefit if the board were to approve the use variance because the variance would run with the land; it would not have been personal to Sprint as the applicant. Spinnaker, supra, 357 N.J. Super. at 111-12.
We rejected this argument, however, because "an application by a wireless telecommunications provider implicates more than 'property-specific' proofs" - it depends on technological factors that are specific to the applicant and does not, therefore, run with the land. Id. at 112. Such applicants must prove that their requested use is technically necessary in order to fix their "coverage gaps" and provide adequate service to the area. Id. at 112-14. Thus, we concluded that Sprint's application here was specific to Sprint:
Therefore, contrary to Spinnaker's argument in this case, a conditional-use variance to permit construction of the nine specific antennae proposed by Sprint would not adhere to the land in the traditional zoning sense. This is so because any other wireless telecommunications provider that may lease Spinnaker's facilities will do so because it has its own discrete, coverage gap. Its facility will be designed to be compatible with its own existing network system. The number, size and location of antennae used by the new provider will depend on the nature and extent of the coverage gap in that system and other technical factors relating to its operation. In short, without Sprint, the application denied by the Board lacks technical relevance.
Therefore, Spinnaker had no standing to appeal the Board's denial of the application. [Id. at 114.]
Plaintiffs attempt to distinguish Spinnaker on the basis that it involved the installation of wireless communications equipment, the approval of which would not run with the land. They stress that approval of the subdivision application, on the other hand, would run with the land. We do not find this proffered distinction significant. Rather, the principle enunciated in Spinnaker is that a party who did not control the application lacked standing to challenge its denial when the party who did control did not wish to pursue the matter further. That principle is fully applicable here.
Plaintiffs also point to our recent decision in Campus Assocs. L.L.C. v. Zoning Bd. of Adjustment of the Twp. of Hillsborough, 413 N.J. Super. 527 (App. Div. 2010), to advance their contention that they have standing in this matter. In that case, the plaintiff signed a contract to sell 13.79 acres to The Richman Group of New Jersey, L.L.C., contingent upon Hillsborough's zoning board granting the necessary use variance to permit construction of affordable housing on the property. Id. at 530. When the board denied the application, Richman decided not to appeal and terminated the contract. Id. at 531.
Campus Associates, however, wanted to pursue the project, either by itself or by contracting again with Richman or some other developer. Ibid. Accordingly, Campus Associates filed a prerogative writs action to challenge the board's denial. Ibid. The trial court then dismissed the complaint on the basis that Campus Associates lacked standing to appeal because it was not the applicant and was not harmed by the board's denial; Campus Associates could always submit a new application on its own behalf. Id. at 532.
We disagreed with the trial court and held that Campus Associates had standing to appeal the denial of Richman's application, "provided the application depended on property specific proofs and not factors unique to the applicant." Id. at 530. In so holding, we reasoned that this case differed from the situation in Spinnaker where factors unique to the applicant caused the variance not to run with the land; here, on the contrary, an ordinary use variance was involved which, if granted, would run with the land and benefit Campus Associates as the landowners. Id. at 534-38.
There is a critical distinction between the situation presented in Campus and the present matter. In Campus, the proposed development was to be sited entirely on the 13.79 acres owned by Campus, and Campus wanted to pursue developing its property and asserted it had the capacity to do so. Id. at 531. Here, on the other hand, plaintiffs own only one small portion of the property needed for this development, and there is no indication they have the ability to pursue the development without the cooperation and participation of Hi-Gear, the adjoining majority property owner.
Plaintiffs also contend that the result of the Board's decision to deny this application has been to cost them $450,000, the price Hi-Gear had agreed to pay for the portion of their property to be purchased. Such a loss, they argue, is sufficient to confer standing upon them. This argument, however, is dependent upon plaintiffs' further contention that the denial of the application did not terminate their contract with Hi-Gear. But, as we have indicated earlier in this opinion, we do not share that view of the parties' contract. The respective obligations of plaintiffs and Hi-Gear to each other ended when the Board did not approve this application. Thus plaintiffs' loss of this business opportunity does not give them standing to challenge the Board's action.
Further, we agree with the trial court that it is of no moment that the Board did not raise the question of plaintiff's standing in its answer. "[S]tanding is an element of justiciability that cannot be waived or conferred by consent." In re Adoption of Baby T., 160 N.J. 332, 341 (1999).
Plaintiffs present one additional argument with respect to their contention that the trial court erred in granting summary judgment to Hi-Gear, that Hi-Gear's failure to pursue an appeal was a breach of the implied covenant of good faith and fair dealing that exists in every contract. Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 224 (2005). We acknowledge that plaintiffs' complaint did not include such an allegation, but we elect to deal with it nonetheless.
Good faith performance of a contract "emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party." Wilson v. Amerada Hess Corp., 168 N.J. 236, 245 (2001) (quoting Restatement (Second) of Contracts § 205 comment a (1981)). The implied covenant "calls for parties to a contract to refrain from doing 'anything which will have the effect of destroying or injuring the right of the other party to receive' the benefits of the contract." Brunswick Hills Racquet Club, Inc., supra, 182 N.J. at 224-25 (quoting Palisades Props., Inc. v. Brunetti, 44 N.J. 117, 130 (1965)).
"Proof of 'bad motive or intention' is vital to an action for breach of the covenant." Id. at 225 (quoting Wilson, supra, 168 N.J. at 251). To prove breach of the covenant, the plaintiff "must provide evidence sufficient to support a conclusion that the party alleged to have acted in bad faith has engaged in some conduct that denied the benefit of the bargain originally intended by the parties." Ibid. (quoting 23 Williston on Contracts § 63:22 (Lord ed. 2002)). Thus, "[a] plaintiff may be entitled to relief under the covenant if its reasonable expectations are destroyed when a defendant acts with ill motives and without any legitimate purpose." Id. at 226 (quoting Wilson, supra, 168 N.J. at 251).
Here, plaintiffs have provided no evidence that Hi-Gear had a "bad motive" for choosing not to appeal; rather, they merely make a bald assertion that Hi-Gear must have wanted to avoid having to purchase their property. Such an allegation, however, entirely lacking in evidential support, is an insufficient basis upon which to deny summary judgment to a party otherwise entitled to that relief.
Finally, plaintiffs have addressed in their brief their substantive contention that the Board's decision to deny this application was erroneous. The trial court did not make a determination on that underlying question, and we decline to address it in the first instance.
The orders under review are affirmed.