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Pinecrest Village, Inc v. Sp 72

July 27, 2012

PINECREST VILLAGE, INC., PLAINTIFF-RESPONDENT,
v.
SP 72, LLC, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2469-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 14, 2012 Before Judges Cuff, Lihotz, and Waugh.

Defendant SP 72, LLC (SP 72), appeals from the Law Division's June 9, 2011 judgment in favor of plaintiff Pinecrest Village, Inc. (Pinecrest). We affirm.

I.

We discern the following facts and procedural history from the record on appeal.

In February 2004, SP 72 and Pinecrest entered into an agreement to exchange parcels of real estate to facilitate SP 72's plans to develop the property on which Pinecrest operated a mobile home park. In exchange for two adjoining lots suitable for Pinecrest's purposes, Pinecrest agreed to transfer its existing property to SP 72, which planned to build a BJ's Wholesale Club (BJ's) at that location.

Under the agreement, SP 72 was required to "improve" its two parcels prior to transfer, which included obtaining all approvals for the development of seventy-five mobile home lots. Pinecrest was "responsible for the demolition and removal of all mobile homes, sheds, trash and debris from [its existing] property." The parties agreed that settlement would occur "30 days after the completion of the Mobile Home Park Improvements or eighteen (18) months after the execution of this Agreement (unless extended)," whichever was later.

In June 2006, at Pinecrest's request, the parties amended their original agreement to extend the time for Pinecrest to complete its obligations. The amendment provided that "Pinecrest shall use best efforts to complete relocation of its residents in 90 days, said relocation of residents shall be completed in 6 months with (3) 30 day extensions if required." It further provided that "[a]ll other terms and conditions of the agreement shall remain the same."

In October 2006, SP 72 entered into an agreement with BJ's for preparation of Pinecrest's old property. The agreement provided that SP 72 would complete certain work by March 1, 2008. Pinecrest, however, had only started the relocation and demolition at its old site after issuance of the first certificate of occupancy (CO) for the new site on October 5, 2007.

According to Pinecrest, the CO could not be obtained earlier because of an overdue water main payment by SP 72. Pinecrest took the position that the timeline contained in the amendment did not begin to run until SP 72 obtained the CO, because the mobile homes could not be relocated to the new site without a CO and demolition at its original site could not occur until the homes were relocated. In contrast, SP 72 took the position that the timeline was triggered on May 5, 2007, the date the first building permit was issued for the new location.

Because of the approaching deadline for completion of the work required for BJ's, Randy Scarborough, one of the principles of SP 72, told Pinecrest that SP 72 wanted to control the relocation and demolition, and that it would pay those costs so it could accelerate the process. That conversation took place in January 2008. Pinecrest, although unhappy with SP 72's desire to accelerate the relocation and demolition, nevertheless agreed to SP 72's proposal.

Pinecrest and SP 72 closed on their real estate transactions on April 25, 2008. On the same day, they entered into a survival agreement that continued each party's respective obligations under the original agreement and the amendment. The survival agreement did not reflect the parties' January 2008 oral agreement or the fact that SP 72 had undertaken performance of work related to the relocation and demolition.

As of August 2009, sixty-six mobile home sites had been completed at Pinecrest's new location, and nine were still under construction. At the end of August, Pinecrest filed a complaint against SP 72, alleging breach of contract, negligence, common law fraud, and consumer fraud. SP 72 filed an answer and counterclaim in September. In its counterclaim, SP 72 ...


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