TOWNSHIP OF WEST DEPTFORD, IN THE COUNTY OF GLOUCESTER, Plaintiff-Appellant,
FULTON BANK N.A. and FULTON BANK OF NEW JERSEY, Defendants-Respondents.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued November 7, 2013
On appeal from Superior Court of New Jersey, Chancery Division, Gloucester County, Docket No. C-34-12.
Mark Cimino argued the cause for appellant.
Christopher R. Gibson argued the cause for respondents (Archer & Greiner attorneys; Mr. Gibson of counsel and on the brief; Patrick M. Flynn, on the brief).
Before Judges Maven and Hoffman.
Plaintiff Township of West Deptford (Township) appeals from the November 26, 2012 order of the Chancery Division granting summary judgment to defendants Fulton Bank N.A. and Fulton Bank of New Jersey (Fulton Bank), and dismissing the Township's complaint that alleged improper disbursement of bond funds relating to the construction of a municipal golf course. For the reasons that follow, we affirm.
On May 6, 1999, the Township designated approximately 600 acres of land bordering the Delaware River as an area for redevelopment that would include a proposed golf course and related facilities (hereinafter known as the "Project"). The Township requested the Gloucester County Improvement Authority (GCIA) to issue a bond to finance the Project. The GCIA agreed to assist but only on the condition the bonds would be "secured by . . . an unconditional and irrevocable general obligation guaranty of an entity with unlimited general taxing powers[, ]" which the Township possesses pursuant to N.J.S.A. 40:37A-80.
In 2000, the Township entered into a Project development agreement with Arret Dobson and Emory Dobson (Dobson Brothers). The agreement provided that the Dobson Brothers would "be solely responsible in all respects and . . . indemnify and hold harmless the Township for all organizational, operational and other requirements necessary to construct, market and operate the Project."
On October 10, 2001, the bond transaction took place. The GCIA issued a $9, 945, 000 taxable guaranteed revenue bond which was secured under the "Guaranty Agreement Between the Gloucester County Improvement Authority and Township of West Deptford" (Guaranty Agreement), whereby the Township unconditionally and irrevocably guaranteed the principal and interest payments on the bond. The Guaranty Agreement included a waiver and release of any defense the Township may have to pay the full principal and interest of the bond. According to Section 5 of the Guaranty Agreement, the "obligations of the Township . . . shall remain in full force and effect until the entire principal of and interest on the Bonds . . . have been paid in full in accordance with and as required by law." Importantly, Section 5 further provided that the "Township's obligations shall not be affected, modified or impaired upon the happening . . . of any of the following events, " including
(ii) the failure to give notice to the Township of the occurrence of an Event of Default under the provisions of the Bond Agreement;
(iii) the extension of the time for payment of any principal of or interest on the Bonds or of the time for performance of any obligations, covenants or agreements ...