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Fields Development Group Co. v. 79-01 Associates, LLC

Superior Court of New Jersey, Appellate Division

July 2, 2013

FIELDS DEVELOPMENT GROUP CO., Plaintiff-Respondent,
v.
79-01 ASSOCIATES, LLC, Defendant-Appellant, and ERNEST H. GELMAN, Defendant.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted January 23, 2013

On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-2670-11.

Greenbaum, Rowe, Smith & Davis, LLP, and Leon I. Behar (Leon I. Behar, P.C.) of the New York bar, admitted pro hac vice, attorneys for appellant (Mr. Behar and Daniel Kuznicki, on the briefs).

Schiffman, Abraham, Kaufman & Ritter, P.C., attorneys for respondent (Robert L. Ritter, on the brief).

Before Judges Alvarez, Waugh and St. John.

PER CURIAM

Defendant 79-01 Associates, LLC, appeals from the March 28, 2012 order of the Law Division granting summary judgment in favor of plaintiff Fields Development Group Co., and ordering its attorney, defendant Ernest H. Gelman, to remit the deposit being held in trust by him to plaintiff. Following our review of the arguments advanced on appeal, in light of the record and applicable law, we affirm.

I.

We consider the facts in the light most favorable to defendant. On April 30, 2004, plaintiff entered into a contract to purchase defendant's property located at 203-207 Van Vorst Street, Jersey City. Plaintiff was required to make two payments in the amount of $250, 000, to Gelman to be held in escrow. The remaining $4.5 million purchase price was to be paid upon the closing of title. The contract provided that closing was to take place on December 20, 2004, "but in any event at least 45 days following DEP [Department of Environmental Protection] approval as defined later in this contract." After the due diligence period, defendant was obligated to demolish the existing structures on the property, the cost of which was to be advanced by defendant but reimbursed by plaintiff at closing, except for certain environmental charges. Defendant, however, failed to demolish the structures.

Up until 2003, an affiliate of defendant had operated a chemical manufacturing facility at the property, and under the Industrial Site Recovery Act (ISRA), N.J.S.A. 13:1K-6 to -14, defendant was required to clean up any contamination prior to transfer of the property. Pursuant to the contract, defendant agreed that it would either (1) clean the property to DEP satisfaction and obtain a no further action letter, or (2) submit a remedial action work plan (RAWP) to the DEP, obtain DEP approval, and enter into a remediation agreement with DEP. Defendant was responsible for the environmental compliance costs.

The contract contained three clauses addressing termination. Paragraph 15 provided that "[t]his contract may be cancelled by Buyer:

(a)by written notice to Seller during the due diligence period defined in ¶25 herein. Such notice shall not require any cause or justification; or
(b) upon the final rejection by DEP of Seller's remedial action work plan (RAWP) so as to prevent or materially impair development of the site for multi-family residential development pursuant to existing zoning as more fully set forth in ¶27 herein.
If Buyer has not duly elected to terminate this contract pursuant to this subpara. (a) or (b) above, the Contract deposit shall be retained by Seller as liquidated damages, unless seller is unable to deliver [] title materially in accordance with the terms of this Contract, in which event the Contract Deposit and the additional Contract Deposit shall be repaid to Buyer, with interest, if any, earned on that deposit and thereupon this ...

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