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Gross v. Iannuzzi

Superior Court of New Jersey, Appellate Division

June 5, 2019

KEVIN A. IANNUZZI, Defendant-Appellant, and CITY OF MARGATE, JAMES GALANTINO, in his official capacity, and ROGER RUBEN1, in his official capacity, Defendants-Respondents.

          Argued December 19, 2018

          On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket Nos. L-3360-14 and L-6543-14.

          Stephen J. Hankin argued the cause for appellant (Hankin Sandman Palladino Weintrob & Bell, attorneys; Stephen J. Hankin, of counsel and on the briefs).

          John S. Abbott argued the cause for respondents City of Margate, James Galantino, and Roger Rubin.

          Salvatore Perillo argued the cause for respondents (Nehmad Perillo & Davis, attorneys; Salvatore Perillo, of counsel and on the briefs). [1]

          Before Judges Alvarez, Reisner and Mawla.


          REISNER, J.A.D.

         Defendants Kevin Iannuzzi, the City of Margate (Margate), and two city officials, James Galantino and Roger Rubin, appeal from a July 14, 2015 trial court order and an August 16, 2016 order denying reconsideration. For the reasons that follow, we affirm in part and reverse in part.

         The trial court overturned Margate's approval of Iannuzzi's plan to demolish his beachfront townhome, which was damaged by Superstorm Sandy, and replace it with an elevated and enlarged free-standing residence. The court also rejected Iannuzzi's alternate plan to rebuild and elevate the townhome using its original footprint. In determining that Iannuzzi could not build a free-standing house and that any replacement structure could not be elevated, notwithstanding current flood-safety standards, the trial court relied on a Declaration of Covenants and Restrictions (the Declaration) that took effect in 1978 when the townhome development was built.

         However, in August 2017, after the trial court decided the case, the Legislature amended N.J.S.A. 58:16A-103 (the Act), concerning flood-safe construction. The Act, originally adopted in 2013 in response to Sandy, prohibits enforcement of development ordinances that would prevent certain flood-safe construction, including the otherwise lawful raising of a Sandy-damaged structure. The 2017 amendment added row houses or attached townhouses held in fee simple to the definition of "structure" and provided that deed restrictions could not be enforced to prevent elevation of a Sandy-damaged structure.[2]

         Our review of the trial court's legal interpretations, including its interpretation of contracts, is de novo. See Manalapan Realty, LP v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995); Cooper River Plaza E., LLC v. Briad Grp., 359 N.J.Super. 518, 528 (App. Div. 2003). Applying that standard of review, we affirm the trial court's order insofar as it precludes Iannuzzi from razing the townhome and building a free-standing house on the lot, instead of either repairing or rebuilding the townhome. We agree with the trial court that, by its terms, the Declaration prevents Iannuzzi from building a free-standing house without the approval of a majority of the other homeowners in the townhome development.[3] The trial court also correctly determined that the Declaration was not abandoned, did not lapse, and remains in effect. On these issues, we affirm for the reasons cogently stated by the trial court in its written opinions dated July 14, 2015, and August 16, 2016, and we conclude that defendants' arguments do not merit further discussion. R. 2:11-3(e)(1)(E). We reach a different conclusion with respect to the issue of elevating the townhome.

         Addressing a matter of first impression, we hold that N.J.S.A. 58:16A-103, as amended, applies to Iannuzzi's individually-owned townhome and permits him to elevate the structure as required by current flood-safety standards, despite Declaration provisions that would otherwise preclude him from doing so. As intended by the Legislature, the amended statute overrides the Declaration and any local development regulations that might otherwise prevent Iannuzzi from elevating the townhome. Hence, we reject plaintiffs' argument that Iannuzzi must obtain dispensation from Margate's Planning/Zoning Board because raising his townhome would be inconsistent with the development's original site plan approvals. Likewise, Iannuzzi's statutory right to elevate his townhome does not depend on whether the townhome or the development as a whole suffered "substantial" damage within the meaning of Margate's flood-safety ordinance.

         We further reject plaintiffs' argument that, even if Iannuzzi is permitted to raise the elevation of the townhome's first floor, he must maintain the existing height of the roofline by reducing the living space within the townhome. That cramped interpretation would defeat the legislative purpose to encourage flood-safe construction. In the circumstances presented here, Iannuzzi's right to protect his property from flood hazards outweighs his neighbors' right to preserve their ocean views.[4] Accordingly, we reverse the trial court order precluding Iannuzzi from elevating the townhome pursuant to the standards set forth in N.J.S.A. 58:16A-103 as amended.


         In light of the narrow issue presented, the record evidence can be summarized as follows. In 1977, a developer obtained Planning Board approval to construct what, at the time, was an unusual townhouse development on the beachfront in Margate. The development consisted of one row of ten attached two-story oceanfront townhomes, and a second row of ten attached three-story townhomes located directly behind the first row. The expressed purpose of this configuration was to give both rows of townhomes an ocean view. The Planning Board particularly noted that feature in its resolution approving the development.

         Although the townhomes shared party walls that extended down into the foundation, each was situated on its own subdivided lot, was owned in fee simple, had its own separate roof and utilities, and was separately assessed and insured (including flood insurance). There was no homeowners' association and rooftop condensers were the sole common element.

         On August 8, 1978, the developer executed and later recorded the Declaration, which set forth certain requirements that were to "run with the land and . . . be binding on all parties having or claiming any right, title or interest in the described property or any part thereof." The Declaration required homeowners to obtain approval of at least a majority of the property owners in order to build additions to their units, and required additions to conform "to the design of the development." The Declaration covenants were to remain in force for twenty-five years (from July 1, 1978 to July 1, 2003), with two additional twenty-five year renewal periods, "unless changed by a vote of two-thirds of the property owners at the time of expiration." Thus, at the time either of the first two twenty-five year periods expired, the owners could vote to change the terms of the Declaration. Otherwise, the covenants would renew unchanged.

         On October 29, 2012, Superstorm Sandy damaged all of the development's beachfront units. Nine of the units were repaired in place, although for reasons not evident on this record, they were not elevated to prevent future flood damage. The tenth townhome, located on the southern end of the row, was so badly damaged that Margate issued a notice of unsafe structure declaring it uninhabitable. The unit's then-owner did not repair it. Iannuzzi eventually bought the unit in its damaged condition, intending to demolish it and replace it with a free-standing house. Iannuzzi obtained a zoning permit for that construction from Margate's zoning officer. The local construction code official wrote Iannuzzi a letter advising that the townhome was substantially damaged by Sandy and any rebuilt structure would have to be elevated to thirteen feet above flood level, requiring an increase in elevation of slightly more than four feet.

         Plaintiff Steven I. Gross filed an appeal with the Board challenging the issuance of the zoning permit. Before the appeal was heard, two groups of plaintiffs, one of which included Gross, filed lawsuits seeking to stop construction of the free-standing house.[5] Iannuzzi defended his right to build the house. However, in the alternative, he asserted a right to rebuild the original townhome in place and elevate it to meet flood safety standards. Plaintiffs vigorously opposed both of Iannuzzi's proposed ...

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