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The City of Asbury Park, A Municipal Corporation of the State of New Jersey v. the Estate of Pasquale N. Vaccaro

May 6, 2011


On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, L-004235-06.

Per curiam.


Argued April 4, 2011

Before Judges Reisner and Ostrer.

Intervenor Asbury Partners (Partners) appeals from an August 2, 2010 order enforcing a settlement between plaintiff, the City of Asbury Park (City), and defendant, the Estate of Pasquale N. Vaccaro (Estate). The Estate cross-appeals from the portion of the August 2 order that denied its application for counsel fees. We reverse the order enforcing the settlement, and remand this matter to the Law Division for an evidentiary hearing.


As part of a plan to redevelop its waterfront area, the City designated Partners as the master redeveloper, and agreed to condemn certain properties at Partners' request. Partners, in turn, agreed to pay the cost of acquiring the condemned properties. In 2006, at Partners' request, the City filed a condemnation complaint to acquire property owned by the Estate. In the condemnation complaint, and in a separate complaint filed in 2007, the City also sought remediation of alleged pollution on the property at the Estate's expense. However, the 2007 complaint was dismissed without prejudice, pending an attempt to settle the environmental issues.

In the condemnation case, the court-appointed commissioners valued the property as worth $649,800, an amount the Estate rejected. By contrast with the condemnation award, the Estate's experts appraised the property as worth between $1.1 million and $1.8 million. In March 2008, the City deposited the amount of the commissioners' award with the court, apparently using funds supplied by Partners. However, the City and the Estate agreed that the Estate would leave the condemnation money in escrow pending resolution of the environmental issues. Expert reports estimated the remediation costs as ranging from a low of $300,000 to a high of over $2.7 million.*fn1

On April 13, 2010, the Estate filed a motion before the judge assigned to the condemnation case, seeking to enforce a settlement it claimed to have reached with the City on March 15, 2010. The Estate supported the motion with a certification from its counsel, Robert Heugle, Jr., and a series of emails concerning the settlement negotiations. Heugle attested that on March 10, 2010, the City's outside counsel, Lawrence Shapiro, called him and extended an offer to settle both the condemnation and environmental litigations. According to Heugle, the terms of the offer were that the Estate would receive the escrowed funds, including accrued interest; the City and Partners would release the Estate from any environmental clean-up or remediation responsibility; and the City would be "released from any further obligation to compensate the Estate for the fair market value of the property." Shapiro told Heugle that his "client" was making the settlement offer "for business reasons." On March 15, 210, Heugle called Shapiro's office and left a message confirming his client's acceptance of the offer. He also sent Shapiro a confirming email.

A day later, Shapiro called Heugle and, while acknowledging that the Estate had accepted the offer, informed Heugle that there was a "mistake" concerning the offer the client had intended him to convey. In an email dated March 16, 2010, Shapiro stated that "the offer that was relayed to you by me was not correct. As I stated, I relayed to you what was relayed to me, however, I was subsequently advised that the offer told to me was not correct." Shapiro apologized for the "misunderstanding" on behalf of his client "and the developer." He explained that "there has been some change in the decision making structure at the developer and, unfortunately, there was a miscommunication down the line as the proposed offer made its way to me."

Shapiro's email then communicated what he stated was "the correct and authorized offer": "the City/Developer will release your client from environmental liability for walking away from the valuation issue. In addition . . . $25,000 would be paid to your client in full and complete settlement of the matter." Shapiro explained that the settlement offer was based on the potentially enormous costs to clean up pollution on the property, and the anticipated costs of continued litigation.

In response to the Estate's motion, Partners moved to intervene for the purpose of opposing enforcement of the settlement. In support of its intervention motion, Partners submitted its version of the relevant events, through a certification from its condemnation counsel, Michael Oxman. His certification explained that because Partners was providing the funds to acquire all of the properties in the redevelopment area, "all settlement offers to landowners that are parties to condemnation proceedings with the City [in that area] are initiated by Asbury Partners and transmitted to the City's attorney for conveyance to landowners."*fn2

Oxman explained the alleged miscommunication of the settlement offer as follows. Partners' general counsel, Richard Levitan, authorized Oxman to communicate this settlement offer to Shapiro: "if the Estate would 'walk-away' from the funds on deposit with the Court, then Asbury Partners would not hold the Estate responsible for any remediation costs" and "Asbury Partners would be willing to offer the Estate a nominal sum if that would conclude a settlement." Shapiro, in turn, was to extend that offer to the Estate.

According to Oxman, instead of communicating Levitan's offer to Shapiro, Oxman "mistakenly informed Mr. Shapiro that he could offer the Estate the monies on deposit with the Court, along with the pledge that the Asbury Partners would forgo future claims against the State for any environmental remediation costs." Oxman attested that the offer he mistakenly communicated to Shapiro was "without the knowledge or consent of Mr. Levitan" or Partners, and that Oxman had no authority to convey that offer to Shapiro. Oxman then described a series of confirming emails from Shapiro and the Estate's counsel on March 15, copies of which were sent to Levitan. On the evening of March 15, Oxman received a phone call from Levitan "during which I immediately realized I had mis-communicated Asbury Partners' offer, and had conveyed an offer for which I had no authority."

Levitan confirmed his views in a March 15 email to Shapiro, stating "Larry - This [the settlement as described in Heugle's email] does not reflect an offer that was on the table." Oxman and Levitan instructed Shapiro to withdraw the offer "first thing in the ...

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