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Herm Realty Group, LLC v. Land Use Board of the Borough of Beach Haven and the Borough of Beach Haven

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 9, 2012

HERM REALTY GROUP, LLC, PLAINTIFF,
v.
LAND USE BOARD OF THE BOROUGH OF BEACH HAVEN AND THE BOROUGH OF BEACH HAVEN, DEFENDANTS.
HERM REALTY GROUP, LLC, PLAINTIFF-RESPONDENT,
v.
MARGUERITE E. ROYER, FRANCESCO RACANELLI, AND RRR ASSOCIATES, LLC, DEFENDANTS/THIRD-PARTY PLAINTIFFS/ INTERVENORS-APPELLANTS,
v.
REGINALD J. RABAN, ESQ., SUNSET HARBOR REALTY, A NEW JERSEY CORPORATION, RAYMOND GARBOWSKI, ELLEN GARBOWSKI, AND LANDAMERICA N.J. TITLE INSURANCE COMPANY,*FN1 THIRD-PARTY DEFENDANTS/ INTERVENORS-RESPONDENTS.

On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2636-05, and Chancery Division, Ocean County, Docket No. C-201-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 26, 2011

Before Judges Axelrad and Sapp-Peterson.

Intervenors-appellants, Marguerite E. Royer, Francesco Racanelli, and RRR Associates, LLC (RRR) (hereafter collectively referred to as appellants), appeal from the August 25, 2010 order denying their motion for reconsideration of the court's June 18, 2010 order amending the September 29, 2006 Final Judgment by Consent (FJC) previously entered between plaintiff, Herm Realty Group, LLC (Herm), and defendants, the Land Use Board of the Borough of Beach Haven (Board) and the Borough of Beach Haven (Borough). We affirm.

By way of background, Herm, at one point, owned two oceanfront properties, designated as Lots 7, 8, 9, and 10 on the Borough's tax map. The properties were conveyed to Herm by two deeds, one for Lots 7 and 8, and one for Lots 9 and 10. The lots are located at 200 and 202 Stratford Avenue, and each property contains a two-family duplex. In 2005, Herm applied for building permits to construct a single-family home on Lots 7 and 8 and a second single-family home on Lots 9 and 10. The Borough zoning officer determined that the lots had merged and therefore did not issue the requested building permits. Herm appealed to the Board the zoning officer's determination that the lots had merged, and also filed an application for minor subdivision approval to convert the two duplexes into two single-family homes. The Board never addressed the zoning officer's determination and denied Herm's application for minor subdivision approval.

Herm filed a complaint in lieu of prerogative writs, seeking reversal of the Board's decision (Herm I) denying minor subdivision approval, as well as the Board's failure to address the zoning officer's determination. An amended complaint added the Borough as a defendant. The parties reached a settlement in September 2006, resulting in entry of the FJC. The FJC required the Borough to issue zoning permits for each property for the purpose of constructing single-family homes. The construction of the two homes was conditioned upon compliance with all zoning requirements. In exchange for the issuance of the zoning permits, Herm was required to execute and enter into an easement with the Borough.

On May 31, 2007, Herm sold 200 Stratford Avenue, Lots 7 and 8, to appellants, but Herm then filed a corrective deed transferring title to Royer, who in turn transferred the property to the limited liability company, appellant RRR. Subsequent to the sale, a dispute arose between Herm and appellants over the existence of an easement which traversed Lots 7 and 8. When this matter could not be resolved amicably, Herm instituted an action against appellants in 2009 to restore the easement (Herm II).

Appellants, as part of their answer to the complaint, filed December 22, 2009, asserted a counterclaim against Herm, seeking, among other relief: (1) a declaration that the conveyance of Lots 7 and 8 to them was void ab initio because the effect of the 2006 settlement was to grant subdivision approval, which could only be granted by the Board at an open public meeting, followed by resolution; (2) a determination that assuming the FJC granted subdivision approval, that approval expired because neither a subdivision map nor deed had been timely filed within 190 days and, therefore, the subdivision expired by operation of law, placing Lots 7, 8, 9, and 10 in their pre-settlement status as merged; and (3) rescission of the sale of Lots 7 and 8 on the ground of mutual mistake, specifically that the inclusion of the fifteen-foot easement in the contract of sale was unintended.

Appellants' answer also included a cross-claim asserted by RRR seeking a declaration that its purchase of Lots 7 and 8 from Royer was void because she did not have the legal authority to convey the property. Finally, appellants filed a third-party complaint, which they subsequently amended, naming as defendants their real estate attorney, real estate agent, and title company.

In April 2010, with notice to all parties involved in both Herm I and Herm II, Herm filed a motion seeking "an Order clarifying, to the extent necessary, the [FJC] entered in this matter." Appellants opposed the motion, advancing several points.

First, appellants stated the pending complaint before the court sought two forms of relief: a determination that 200 and 202 Stratford Avenue had not merged, and an order reversing the Board's denial of Herm's minor subdivision application and granting minor subdivision approval. Next, appellants argued Herm's counsel drafted the FJC, and had the settlement that was reached included the parties' acknowledgment the properties had not merged, that fact would have been made clear in the FJC. Additionally, appellants argued Herm's counsel failed to attach any documentation in the form of correspondence, resolutions, or other documentation, expressing what the settlement meant. Further, appellants maintained that under N.J.S.A. 40:55D-47(d), "a minor subdivision expires within 190 days from municipal approval." Additionally, they urged since it was undisputed Herm never filed a plat or a deed and the 190-day period had elapsed, subdivision expired and the property reverted to its merged status. Finally, appellants urged that the FJC, at best, reversed the denial of the minor subdivision and granted Herm the right to build a single-family home on each of the lots, subject to compliance with other zoning laws.

On May 14, Judge Vincent J. Grasso rendered an oral decision, in which he first determined that he would treat the motion as an application under Rule 4:50-1(f), which rule the judge noted speaks to the need to achieve equity and justice. He found "[t]he equities of the matter are served by clarifying and settling the title claim against the property owners without prejudice to Royer's and Racanelli's underlying and remaining claim of easement dispute." The judge memorialized his ruling in an order dated June 1. The order, in pertinent part, stated:

2. . . . The court finds that said [FJC] was silent on the issue of the merger of the subject properties known as 200 and 202 Stratford Avenue, Beach Haven, in the event said property was not developed with single-family dwellings.

3. The court has considered the submissions to the court and is satisfied and finds that the [FJC] dated September 29, 2006 can be amended and supplemented to provide that subdivision is not required by the Borough of Beach Haven for the separate conveyance of 200 and 202 Stratford Avenue, Beach Haven, because the properties have not merged and remain as two separate lots.

Thereafter, appellants' attorney wrote to the court expressing concern that the court's order could be interpreted as the court having made a ruling, as a matter of law, that the properties had not merged. Noting that no testimony had been taken and "no briefs were submitted to argue that point," counsel requested a clarification of the court's order to reflect that the court's amendment to the FJC was "only meant to say that [the court has] found that as part of the settlement[,] the parties agreed that the properties had not merged[.]"

Herm's counsel responded to this correspondence by advising the court that he believed appellants' counsel's concern was "misplaced" but ultimately agreed Herm would not take the position that the court made a determination, as a matter of law, that the properties had not merged.

On June 18, Judge Grasso entered a second amendment to the FJC, editing the language of paragraph three as follows: "3. The court has considered the submission to the court and is satisfied and finds that the [FJC] dated September 29, 2006 is amended and supplemented to provide that the parties to the [FJC] intended it to provide that the properties had not merged."

Appellants filed a motion for reconsideration of the second amended FJC and also sought an order vacating the original settlement, as modified by the second amendment to the FJC. The court denied the motion and entered an order memorializing its decision on August 25, 2010.

On appeal, appellants raise the following points for our consideration:

POINT I

AS ONLY THE ZONING OFFICER AND THE BOARD HAD THE LEGAL AUTHORITY TO MAKE ANY DECISION ON WHETHER THE PROPERTIES HAD MERGED, THE SETTLEMENT IS VOID[,] AS THE BOARD FAILED TO EXERCISE ITS SOLE LEGAL AUTHORITY TO SETTLE THE CASE.

A. THE BOROUGH ZONING OFFICER WAS THE SOLE BOROUGH ADMINISTRATIVE OFFICER WITH THE AUTHORITY TO MAKE A DECISION AS TO WHETHER THE PROPERTIES HAD MERGED.

B. THE BOARD WAS THE SOLE BOROUGH AUTHORITY TO WHOM HERM HAD THE RIGHT TO APPEAL THE DECISION OF THE ZONING OFFICER THAT THE PROPERTIES HAD MERGED.

C. THE BOARD FAILED TO EXERCISE ITS SOLE AUTHORITY TO SETTLE THE CASE.

POINT II

THE SETTLEMENT IS VOID[,] AS THERE WAS NO COMPLIANCE WITH THE OPEN PUBLIC MEETING ACT.

I.

Preliminarily, we agree with Herm's assertion that appellants' appeal is untimely. Judge Grasso's second amendment to the FCJ was entered on June 18. Under Rule 2:4-1(a), appellants had forty-five days, or until August 2, during which to file an appeal.

On July 8, appellants timely filed their motion for reconsideration pursuant to Rule 4:49-2, tolling the forty-five-day appeal period pursuant to Rule 2:4-3(e). As stated in the rule, "[t]he remaining time shall again begin to run from the date of the entry of an order disposing of such a motion [to the trial court for rehearing or reconsideration.]" R. 2:4-3(e). Thus, upon Judge Grasso's denial of the reconsideration motion on August 25, appellants had twenty-five days, the time remaining in the forty-five-day period, during which to file an appeal of the June 18 order. The appropriate filing date would have been September 19. Because that date fell on a Sunday, appellants had until the next day, September 20, 2010, to file their appeal. The appeal, however, was not filed until September 22, 2010. The appeal was therefore untimely and no motion to extend the time for filing an appeal was made, as required by Rule 2:4-2(a). We have nonetheless determined to consider the matter on the merits.

II.

Rule 4:49-2 governs motions for reconsideration, which are subject to the court's exercise of its principled discretion. Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 263 n.8 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988). "A litigant should not seek reconsideration merely because of dissatisfaction with a decision of the [c]court." D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990). "Reconsideration should be utilized only for those cases . . . in which either 1) the [c]court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the [c]court either did not consider, or failed to appreciate the significance of probative, competent evidence." Ibid.

Moreover, reconsideration is not a vehicle through which parties are afforded a second opportunity to address that which should have been addressed in the original motion. State v. Fitzsimmons, 286 N.J. Super. 141, 147 (App. Div. 1995), remanded on other grounds, 143 N.J. 482 (1996). In other words, the purpose of reconsideration is to correct a court's error or oversight, not to "re-argue [a] motion that has already been heard for the purpose of taking the proverbial second bite of the apple." Ibid.

We note the motion for reconsideration raised, for the first time, that the FJC violated the Open Public Meetings Act (OPMA), N.J.S.A. 10:4-1 to -21. Thus, Judge Grasso correctly concluded that his decision was not based upon his incorrect analysis or an issue that he had overlooked. We also conclude the issue before the court did not involve a matter of substantial public interest. Rather, the issue before the court involved a private dispute arising out of Herm's contention appellants' actions obstructed its easement rights over Lots 7 and 8.

As we have previously stated, reconsideration is relief that should be granted only "for those cases which fall into that narrow corridor in which either (l) the Court has expressed its decision based upon a palpably incorrect or irrational basis, or (2) it is obvious that the Court either did not consider, or failed to appreciate the significance of probative, competent evidence." Fusco v. Board of Educ. of City of Newark, 349 N.J. Super. 455, 462 (App. Div. 2002) (quoting D'Atria v. D'Atria, 242 N.J .Super. 392, 401 (Ch. Div. 1990)). We discern no abuse of discretion by Judge Grasso in declining to grant reconsideration to appellants. Ibid.

III.

Addressing appellants' claim for relief pursuant to Rule 4:50-1, we first observe that appellants have never made a formal motion, under Rule 4:50-1, at any time since they acquired title to Lots 7 and 8. The first reference to Rule 4:50-1 is contained in appellants' counsel's letter memorandum filed in support of appellants' motion for reconsideration in which it is stated:

Rule 4:50-1 states that the grounds for relief from a final judgment or order are, among others, (d) the judgment or order is void, and (f) any other reason justifying relief from the operation of the judgment or order. As these are intrinsically intertwined, I will discuss them together.

It is unclear what is meant by "intrinsically intertwined," but whether this refers to the two rules or the underlying facts upon which the relief is being sought, we disagree with such characterization. Rule 4:49-2 is directed to judicial error resulting from the court's plainly incorrect reasoning or the court's failure to consider particular evidence or where there is a basis for the court to consider new evidence. Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996). On the other hand, relief from judgment under Rule 4:50-1 involves a direct attack upon a judgment or order, provides specific grounds upon which relief may be granted, and irrespective of the ground raised for relief, it is subject to the court's exercise of its sound discretion. Morristown Hous. Auth. v. Little, 135 N.J. 274, 283-84 (1994).

Nor do we conclude the facts are intertwined. It is undisputed that appellants never raised OPMA in their opposition to Herm's motion for clarification, which the court treated as a motion for relief from judgment under Rule 4:50-1(f). Further, the clarification motion addressed the intent of the parties surrounding the settlement that led to the entry of the FJC, while the reconsideration motion addressed the Board's action in relation to the OPMA and the Municipal Land Use Law, N.J.S.A. 40:55D-1 to -163 (MLUL).

A.

Focusing our discussion on the motion itself, it is well-settled that other than relief from a default judgment, a motion for relief from judgment asserting any of the grounds for relief under Rule 4:50-1 should be granted sparingly. Housing Auth., supra, 135 N.J. at 285-86. The rationale underlying this restrained approach to setting aside a judgment is the court's interest in finality of judgments. Ibid. Thus, the court must balance "'the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case.'" Baumann v. Marinaro, 95 N.J. 380, 392 (1984) (quoting Manning Eng'g, Inc. v. Hudson Cnty. Park Comm'n, 74 N.J. 113, 120 (1977)). The decision to set aside a judgment is committed to the sound discretion of the court and will not be disturbed on appeal absent a showing of abuse of that discretion. Badalamenti v. Simpkiss, 422 N.J. Super. 86, 103 (App. Div.), certif. denied, 208 N.J. 600 (2011).

Judge Grasso concluded there was no basis for relief under either subsection (d) or (f). Rule 4:50-1(d) permits a party to be relieved from the consequences of a judgment on the basis that the "judgment or order is void." A judgment or order that is void speaks to the court's authority to enter the final judgment. Bascom Corp. v. Chase Manhattan Bank, 363 N.J. Super. 334, 341 (App. Div. 2003), certif. denied, 178 N.J. 453, cert. denied, 542 U.S. 938, 124 S. Ct. 2911, 159 L. Ed. 2d 813 (2004). Rule 4:50-1(f) affords relief for "any other reason justifying relief from the operation of the judgment or order." Relief under subsection (f) requires a demonstration of "exceptional circumstance" and those circumstances do not relate to the correctness or error of the original judgment, which are irrelevant considerations. In re Guardianship of J.N.H., 172 N.J. 440, 476 (2002). Rather, relief under subsection (f) is dependent upon the totality of circumstances. Ibid. Moreover, relief pursuant to either subsection (d) or (f) must, however, be sought within a reasonable time.

We are satisfied that Judge Grasso did not abuse his discretion in denying relief to appellants pursuant Rule 4:50-1. Appellants failed to avail themselves of the benefits of this rule within a reasonable time. Orner v. Liu, 419 N.J. Super. 431, 436-37 (App. Div. 2011).

Although appellants were not parties to the Herm I litigation, they were aware that litigation had been commenced surrounding the Borough's contention that the two lots were merged. Paragraph 13 of the sales contract between Herm and appellants, in pertinent part, states:

The Seller discloses that this property was the subject of litigation wherein the Borough of Beach Haven asserted that this property had merged with the property to the south also owned by the Seller. Although the Seller believes that the merger issue has been resolved and that the two lots are separate and distinct, if the municipality refuses to issue a certificate of occupancy for the sale of this lot to the Buyer, either party many cancel this contract, the deposit shall be returned to the Buyer and there will be no further rights or responsibilities between the parties.

Thus, appellants were fully aware, as early as 2007, at the time the property was conveyed to them, that at least as far as Herm was concerned, the two lots were separate and distinct. A certificate of occupancy (CO) was issued to appellants, and the transfer of title from Herm to appellants occurred. As such, it may reasonably be inferred, from the language of the contract, that Herm, as the seller, understood the settlement to have resolved the question of merger. Further, the issuance of the CO to appellants prior to closing on the property evidences the Borough's understanding that the settlement resolved the issue of merger.

Moreover, it is apparent that appellants were content to accept Herm's understanding that the issue of merger had been resolved because they proceeded to closing upon receipt of the CO. It was only after Herm sought to enforce its claimed easement rights in the Herm II litigation that appellants raised, in their counterclaim filed December 22, 2009, the alleged OPMA and other procedural and substantive defects surrounding the FJC.

Notwithstanding their claim that the entry of the FJC violated the OPMA, therefore voided the FJC, appellants never affirmatively moved for relief from the FJC. Thus, the nearly seven-month delay in seeking relief from the judgment given the history of the lots of which appellants were aware as far back as 2007, was inconsistent with the mandate that relief from judgment be sought within a reasonable time. Orner, supra, 419 N.J. Super. at 436-37 (noting that even when a motion is filed within the one-year time period required under subsections (a),

(b), and (c), that does not mean a movant has acted reasonably). Therefore, Judge Grasso did not abuse his discretion when he denied reconsideration and relief from judgment.

B.

Finally, Judge Grasso correctly noted that the question of merger implicated a question a law. A trial court's review of a Board's legal determination is de novo. Adams v. Delmonte, 309 N.J. Super. 572, 583 (App. Div. 1998). Thus, had the Board determined the issue of merger, the trial judge in the Herm I litigation owed no deference to the Board's legal conclusion. Manalapan Realty, L.P. v. Twp. Committee of Manalapan, 140 N.J. 366, 378 (1995). The prerogative writs action filed in Herm I specifically raised, in addition to the Board's error in denying minor subdivision approval, the Board's failure to rule on the zoning officer's determination that the properties had merged. Because of the FJC, the court did not have to resolve the legal question, whether the lots had merged. It is, however, clear Herm's ultimate objective in bringing the prerogative writs action was to obtain a ruling that would allow it to treat the properties as two separate and distinct lots. As Herm's counsel explained to the Board in its appeal of the zoning officer's determination and its application for minor subdivision approval:

What [Herm is] attempting to do is reinstate what we believe is the proper condition of the property; that is, as two separate lots with access to the southerly lot by means of a [fifteen]-foot easement that is there over Stratford Avenue. And at this moment they're not sure what they would do with the property after that. There are three options. They could re-sell the existing lots individually with the existing duplexes on them. They could come back before this board for individual variances to tear down the existing duplexes and put up a single-family residential home on each of those lots for retail. Or decide --somebody comes along and wants a big oceanfront lot, then they would undo the subdivision and sell it as one lot for one single-family residential lot.

So they don't get those options without reinstating, we suggest, what was there and should not have disappeared. . . .

The fact that when title to the property was transferred to Herm, it was done so in two separate deeds, one for Lots 7 and 8 and one for Lots 9 and 10, and the fact that the settlement directed the Borough "to issue zoning permits for each of the tax lots, for the construction of a single[-]family home on each lot," supports Judge Grasso's determination that the intent of the FJC was to treat the lots as not merged.

As a practical matter, had the zoning officer not determined that the lots had merged, permits, if otherwise in compliance, would have been issued, and there would have been no need to seek minor subdivision approval because the issuance of the permits would have meant the lots were being treated as separate and distinct properties. Consequently, we find no merit to appellants' contention in their reply brief that "[a]t best, what the [FJC] did was reverse the denial of the minor subdivision and grant Herm the right to build a single[-]family home on each of the lots provided that all of the other conditions set forth in the settlement were met." This interpretation of the settlement is completely inconsistent with the clear language of the FJC, which simply directs the issuance of the construction permits. In light of this directive, the fairer reading of the FJC is that it reversed the zoning officer's determination that the lots were merged. As our Court stated in Jock v. Zoning Bd. of Adjustment, 184 N.J. 562, 578 (2005), the merger doctrine is implicated when a property owner seeks approval for a substandard parcel of land, which is not the condition of the lots at issue here. The Court explained:

The term "merger" is used in zoning law to describe the combination of two or more contiguous lots of substandard size, that are held in common ownership, in order to meet the requirements of a particular zoning regulation. Robert M. Anderson, 2 American Law of Zoning § 9.67 (4th ed. 2005). In effect, it requires subdivision approval for the development of individual substandard parcels if contiguous parcels have been, at any relevant time, in the same ownership and, at the time of such ownership, the parcel was not substandard. [Ibid.]

The lots here were two fully developed improved lots. A two-family duplex is situated on each lot. Merger of these properties would not have promoted compliance with the Borough's zoning ordinance that prohibits "more than one residential building on each subdivision lot of record." Borough Ordinance § 212-20(d).

To summarize, Judge Grasso properly denied appellant's motion for reconsideration because the motion failed to articulate any matters or controlling decisions overlooked, and the OMPA and MLUL issues raised involved facts known to appellants prior to the entry of the June 18, 2010 order. Cummings, supra, 295 N.J. Super. at 384-85. The relief sought pursuant to Rule 4:50-1, was not pursued within a reasonable time and also lacked merit. Thus, when the strong judicial interest in upholding settlements, N.J. Turnpike Auth. v. Local 196, I.F.P.T.E., 190 N.J. 283, 292-93 (2007), is combined with the strong judicial interest in finality of judgments, Housing Auth., supra, 135 N.J. at 286, Judge Grasso did not abuse his discretion in denying appellants relief from judgment under either subsection. Id. at 283-84.

Affirmed.


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