Opinion
DOCKET NO. A-1239-13T3
04-17-2015
FIELDSTONE ASSOCIATES, L.P., Plaintiff-Appellant, v. BOROUGH OF MERCHANTVILLE, Defendant-Respondent.
Jeffrey I. Baron argued the cause for appellant (Baron & Brennan, P.A., attorneys; Mr. Baron, of counsel and on the briefs; Jeffrey M. Brennan, on the briefs). M. James Maley, Jr. argued the cause for respondent (Maley & Associates, P.C., attorneys; Mr. Maley and Erin E. Simone, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Nugent and Accurso. On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-2493-13. Jeffrey I. Baron argued the cause for appellant (Baron & Brennan, P.A., attorneys; Mr. Baron, of counsel and on the briefs; Jeffrey M. Brennan, on the briefs). M. James Maley, Jr. argued the cause for respondent (Maley & Associates, P.C., attorneys; Mr. Maley and Erin E. Simone, on the brief). PER CURIAM
In this specific performance action, the first of two related cases we decide today, plaintiff redeveloper Fieldstone Associates, L.P. appeals from the Law Division's September 27, 2013 order granting defendant Borough of Merchantville's motion to dismiss Fieldstone's complaint and denying its cross-motion for summary judgment. Because we agree with the Law Division that Fieldstone could not compel the Borough to adopt an ordinance through the remedy of specific performance, we affirm.
Merchantville began the process of trying to redevelop portions of its downtown almost fifteen years ago. The Borough Council tasked the Planning Board to undertake a needs study in 2001. The Planning Board conducted the study and, after public hearing, recommended in 2004 that the Merchantville Town Centre East Study Area be designated as an area in need of redevelopment. Later that year, the Council designated the area as one in need of redevelopment and adopted an ordinance to implement the Redevelopment Plan. In 2009, the Borough issued a request for proposals seeking potential redevelopers, and the Borough Council eventually adopted a resolution authorizing the execution of an agreement with Fieldstone to carry out the redevelopment projects in the Town Centre East Redevelopment Area.
The parties entered into their Redevelopment Agreement in 2010, amending it twice thereafter. Fieldstone contends three provisions, sections 1g, 1i(b) and 9d, establish its right to relief. The pertinent portions of those provisions provide as follows:
1. Borough Responsibilities
g. Redevelopment Plan Amendments
Redeveloper, in cooperation with Borough shall prepare documentation for amendments to the Redevelopment Plan deemed necessary by the Redeveloper to develop the Redevelopment Project in accordance with the approved Concept Plan. The Redeveloper shall provide the approved Conceptual Plan with proposed Master Plan amendments, if necessary, and proposed development regulations, including planned development regulations. The Borough has approved the Concept Plan for Redeveloper's proposed redevelopment for the Project Site being in compliance with the intent of the Redevelopment Plan and Borough shall amend the Redevelopment Plan to establish zoning standards, including bulk regulations to permit development of the Project without the requirement of variances or waivers, consistent with the approved Concept Plan.
. . . .
i. Grants and Other Benefits/Cooperation
(b.) Borough and the Redeveloper shall cooperate with each other in all respects and shall use their best efforts to effectuate the purposes of this Agreement. . . . Without limiting the generality of the foregoing, Borough shall (a) examine its master plan to the extent required to conform to the Redevelopment Plan, [and] (b) consider the adoption of zoning with respect to the [Town Centre East] Project Area consistent with the Amended Redevelopment Plan . . . . In the event that economic market or site conditions render the
Redevelopment Project impractical or unfeasible, the Borough and Redeveloper shall cooperate to revise the Redevelopment Plan and Concept Plan to permit the uses and bulk standards reasonably necessary to develop an economically feasible redevelopment project, consistent with market, finance and site conditions. Nothing contained herein is intended to require an impermissible delegation of governmental authority or responsibility.
. . . .
9. Events of Default
d. If Redeveloper fulfills its obligations hereunder, but there is a continuing Borough Default, or Borough materially breaches any representation or warranty contained herein, if the Closing has not occurred, the Deposit shall immediately be returned to Redeveloper, Redeveloper shall be reimbursed out of pocket expenses by the Borough and Redeveloper may, at its option, a) specifically enforce [the] Agreement, (b) avail itself of any other rights and remedies available to Redeveloper at law, but not including consequential damages, or in equity as a result of such Default, or (c) avail itself of any combination of the foregoing[.]
The parties' agreement further provides in section 9f, that "[i]n the event the parties disagree as to whether a default exists, the parties shall endeavor to resolve the dispute, and any related claim inuring to the benefit of the non-defaulting party, by mediation." In the event mediation is unsuccessful, the parties agreed that they "shall submit to binding Arbitration." They further agreed that "[t]he obligation to mediate and/or arbitrate shall not apply in the event a party seeks injunctive relief or specific performance."
Fieldstone presented its proposed Redevelopment Plan Amendment to the Borough Council in 2011. The Amendment consists of the overlay zoning for the Redevelopment Area that Fieldstone contends is necessary to permit development of the area without variances or waivers consistent with the previously approved concept plan. Fieldstone contended before the trial court and continues to assert on appeal, that instead of "adopting the Redevelopment Plan Amendment as required by the Redevelopment Agreement, . . . the Borough did nothing for a period of approximately six months" before finally referring the Amendment to the Planning Board for assessment of the Amendment's consistency with the Borough's Master Plan.
Over eighteen months later in February 2013, the Board adopted a resolution recommending that the governing body reject Fieldstone's proposed Redevelopment Plan Amendment as inconsistent with both the Master Plan and the Redevelopment Plan. The following month, the Borough Council adopted the Board's recommendation and rejected Fieldstone's Redevelopment Plan Amendment. Fieldstone subsequently declared the Borough in default and filed this action to compel it to adopt Fieldstone's Redevelopment Plan Amendment.
Fieldstone filed a prerogative writs action challenging the validity of the resolution on the grounds that the Board's failure to act within forty-five days of the Council's referral as required by N.J.S.A. 40A:12A-7e, stripped the Board of jurisdiction, and that participation of two Board members who owned property within 200 feet of the redevelopment area voided the Resolution in any event. The Law Division rejected those claims, and we affirmed in an opinion also released today. Fieldstone Associates, L.P. v. Joint Land Use Board of the Borough of Merchantville, No. A-3437-13 (App. Div. Apr. 17, 2015).
The Borough moved to dismiss the complaint for failure to state a claim, and Fieldstone cross-moved for summary judgment on its claim for specific performance. In opposition to the motion, the Borough argued that Fieldstone failed to prepare documentation for a proposed Amendment in cooperation with the Borough, and the Redevelopment Plan Amendment it presented was not consistent with the Redevelopment Agreement or the approved Concept Plan. The Borough maintained that it was not in default of any of its obligations under the Redevelopment Agreement.
After hearing oral argument, Judge Fratto granted the Borough's motion to dismiss and denied Fieldstone's cross-motion for summary judgment on its specific performance claim. The judge found that the Borough's elected representatives, on recommendation of the Joint Land Use Board, determined that Fieldstone's proposed Redevelopment Plan Amendment was contrary to public policy expressed in the Borough's Master Plan and that adoption of the Amendment would result in the enactment of an ordinance "the Borough does not wish to enact." He further held that "[a] government entity is without power to contract away [its] governmental powers" and to the extent the parties' Redevelopment Agreement could be read to require the Borough to adopt legislation dictated by Fieldstone, any such provisions are unenforceable.
We agree that Judge Fratto correctly denied Fieldstone's claim for specific performance and dismissed the action to allow the parties to resolve their dispute through mediation or arbitration as they agreed. See Borough of Seaside Park v. Comm'r of New Jersey Dep't of Educ., 432 N.J. Super. 167, 200 (App. Div.) (noting appellate review of an order dismissing an action under Rule 4:6-2(e) for failure to state a claim upon which relief may be granted "is governed by a standard no different than that applied by the trial courts"), certif. denied, 216 N.J. 367 (2013). Our review of the parties' Redevelopment Agreement, and specifically those sections relied upon by Fieldstone, does not disclose any obligation on the part of the Borough to adopt the specific plan amendments proffered by Fieldstone. Instead, reading the language in accordance with the plain meaning of the words makes clear that the Borough's obligation is to amend the Redevelopment Plan to establish zoning standards to permit development of the project without variances or waivers consistent with the approved Concept Plan. There is no obligation on the part of the Borough to adopt this ordinance or any ordinance proposed by Fieldstone.
Fieldstone has failed to cite any authority for its assertion that a municipality could be compelled by specific performance to adopt a zoning ordinance under the circumstances presented here, and we are aware of none. Its arguments that "no published decisions exist wherein a court has held that specific performance could not be obtained in these circumstances," and that it does not seek to exercise any actual legislative powers by its drafting of the document the municipality would enact are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Fieldstone also contends the Law Division erred in sending its remaining claims for breach of contract, promissory estoppel and breach of the covenant of good faith and fair dealing to mediation and arbitration. We disagree. Acknowledging that the parties' agreement requires disputes over alleged defaults be submitted to mediation and arbitration, Fieldstone argues that the "provision only applies to situations where there has been a 'disagreement' about whether default has occurred," and no such disagreement "legitimately exists" here. We choose to quote its reasons at length.
The Redevelopment Agreement required the Borough to adopt the Redevelopment Plan Amendment in order to implement the previously-approved Concept Plan. By its own admission, the Borough did not adopt the Redevelopment Plan Amendment. Therefore, the Borough defaulted in its obligation. The Borough's contention that it could never be compelled, as a matter of law, to adopt the Redevelopment Plan Amendment exists [as] a separate, discrete issue from what the Redevelopment Agreement actually required the Borough to do. Since no legitimate disagreement about the Borough's failure to adopt the Redevelopment Plan Amendment exists, Section 9(f)'s requirement for mediation plainly does not apply.
Although the argument is easily followed, it is impossible to accept. Having reviewed the record in this case and its companion, also decided today, we are convinced the parties have very different views as to their respective obligations under the Redevelopment Agreement, including whether the Borough's failure to adopt the Redevelopment Plan Amendment proposed by Fieldstone constituted an event of default. Accordingly, we agree with Judge Fratto that Fieldstone is not entitled to a specific performance remedy and the proper forum for Fieldstone's claims is mediation and arbitration.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION