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Victor Urban Renewal Group LLC v. City of Camden

United States District Court, D. New Jersey

March 31, 2019

VICTOR URBAN RENEWAL GROUP LLC and DRANOFF PROPERTIES, INC., Plaintiffs,
v.
THE CITY OF CAMDEN, et al., Defendants.

          AARON RICHARD KRAUSS COZEN O'CONNOR On behalf of Plaintiff

          MICHAEL J. WATSON WILLIAM M. TAMBUSSI BROWN & CONNERY, LLP On behalf of Defendants

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This matter concerns claims by Plaintiffs, Victor Urban Renewal Group LLC and Dranoff Properties, Inc., against the City of Camden, among others, arising out of Plaintiffs' attempt to sell The Victor Building in Camden, New Jersey. Plaintiffs allege:

Victor Urban Renewal Group LLC came into the City of Camden almost 16 years ago - long before any other major developers even considered the possibility of doing business in Camden - to redevelop The Victor Building, a blighted and long-abandoned RCA manufacturing facility on Camden's waterfront, into a thriving luxury apartment building. Despite being turned down by 49 banks, Victor Urban Renewal was able to complete the redevelopment and make The Victor Building the keystone of Camden's revival. Absent the tax exemptions granted by the City of Camden, Victor Urban Renewal would not have been able to do so. However, in a classic bait-and-switch, now that Victor Urban Renewal has signed a contract to sell The Victor Building for more than $71 million to Aimco One Market Street Urban Renewal, LLC, the City of Camden, through its officials such as Jason Asuncion and Michelle Banks-Spearman, has refused to keep up its end of the bargain and transfer the tax exemptions as it contractually promised to do.”

(Amended Complaint, Docket No. 7 at 1-2.)

         Plaintiffs claim that the City of Camden has breached its contractual obligations and has deprived Victor Urban Renewal of its property without due process of law. Plaintiffs also claim that in an effort to exert pressure on Victor Urban Renewal, the City of Camden has acted in concert with the Camden Redevelopment Agency to deny a related company - Dranoff Properties, Inc. - the benefit of its option to buy the Radio Lofts building in Camden.[1] (Id. at 2.)

         Plaintiffs filed their original complaint on June 20, 2018. Defendants filed a motion to dismiss on July 2, 2018. On July 20, 2018, Plaintiffs filed an amended complaint. Defendants renewed their motion to dismiss on August 3, 2018, and that motion is pending before the Court. In addition to challenging the sufficiency of Plaintiffs' claims under Federal Civil Procedure Rule 12(b)(6), Defendants' main basis for the dismissal of Plaintiffs' complaint is the forum selection clause in the parties' agreements. Defendants argue that the forum selection clause requires any dispute between the parties to be brought in New Jersey state court, and failing that, submitted to arbitration. On August 9, 2018, Plaintiffs filed their opposition to Defendants' motion, arguing, among other things, that the forum selection clause is permissive and not mandatory, thus causing their complaint filed in this Court to be proper.

         While Defendants' motion has been pending, Defendants filed a complaint against Plaintiffs in New Jersey Superior Court, Law Division, Camden County on December 10, 2018. See City of Camden, et al. vs Victor Urban Renewal, LLC, et al., Docket No. CAM-L-004612-18. On December 13, 2018, Victor Urban Renewal moved to dismiss the City of Camden's state court complaint, arguing that under the entire controversy doctrine, Camden should have filed counterclaims in this action rather than institute a separate action in New Jersey state court. The state court judge denied that motion on January 11, 2019.

         On January 22, 2019, Victor Urban Renewal filed an answer in the state court action and asserted a counterclaim complaint against the City of Camden.[2] On March 18, 2019, the state court judge ordered the case to proceed with discovery.

         This Courts sets forth the procedural history in this Court and state court because it compels the dismissal of this action for two reasons - the forum selection clause in the parties' agreement and the Younger abstention doctrine.

         1. Forum Selection Clause

         The Court must dismiss Plaintiffs' complaint pursuant to the parties' forum selection clause in their agreement because the Court is constrained to follow the New Jersey Supreme Court's interpretation of the exact same forum selection clause in an urban renewal agreement containing tax exemptions.

         The forum selection clause in the parties' agreement provides:

In the event of a breach of the within Agreement by either of the parties hereto or a dispute arising, between the parties in reference to the terms and provisions as set forth herein, either party may apply to the Superior Court of New Jersey by an appropriate proceeding, to settle and resolve said dispute in such fashion as will tend to accomplish the purpose of the Long Term Act. In the event the Superior Court shall not entertain jurisdiction, then the parties shall submit the dispute to the ...

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