Opinion
DOCKET NO. A-4200-11T1
11-18-2013
TOWNSHIP OF READINGTON, Plaintiff-Respondent, v. WILMARK BUILDING CONTRACTORS, INC., and its heirs, devises, representatives, and successors in right, title and interest; THE EVERGREEN TRUST II, and its heirs, devises, representatives, and successors in right, title and interest; MARK W. HARTMAN, individually, as president of Wilmark Building Contractors, Inc. and as a trustee of the Evergreen Trust II; MELINDA MCPHAIL, individually and as a trustee of the Evergreen Trust II, Defendants-Appellants, and STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION, GREEN ACRES PROGRAM, Defendants.
Arnold C. Lakind argued the cause for appellants (Szaferman, Lakind, Blumstein & Blader, P.C., attorneys; Mr. Lakind, on the brief). Valerie J. Kimson argued the cause for respondent (Mason, Griffin & Pierson, P.C., attorneys; Ms. Kimson, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Sapp-Peterson, Nugent, and Haas.
On appeal from the Superior Court of New Jersey, Chancery Division, Hunterdon County, Docket No. C-14040-10.
Arnold C. Lakind argued the cause for appellants (Szaferman, Lakind, Blumstein & Blader, P.C., attorneys; Mr. Lakind, on the brief).
Valerie J. Kimson argued the cause for respondent (Mason, Griffin & Pierson, P.C., attorneys; Ms. Kimson, of counsel and on the brief). PER CURIAM
Plaintiff, Township of Readington, filed this action to quiet title to land that defendant Wilmark Contractors, Inc., through its president, defendant Mark H. Hartman, had deeded to the Township for open space ten years earlier when the Township's planning board approved Wilmark's development application for a major subdivision. The trial court granted summary judgment to the Township and dismissed the counterclaim of Wilmark, Hartman, and the other defendants, The Evergreen Trust II and Melinda McPhail, on the basis of the entire controversy doctrine. Defendants appealed. We affirm.
On March 30, 2012, the Chancery Division filed a memorandum of decision explaining its reasons for granting summary judgment to plaintiff and denying defendants' cross-motion for summary judgment. On the same day, the court filed an order denying defendants' cross-motion for summary judgment. The parties have not included in the record the order granting summary judgment to the Township.
I.
In the prior federal action, which the trial court held to preclude the claims in this action, Wilmark and Hartman sought compensation for the land they had dedicated to the Township (the open space parcel). They claimed that the mandatory dedication of the property for open space was constitutionally prohibited by the takings clause of the Fifth Amendment to the United States Constitution. Alternatively, they claimed, among other things, that the land use development ordinance mandating the dedication was unlawful because it was contrary to the Municipal Land Use Law (MLUL), N . J . S . A . 40:55D-1 to -163. To provide the context of both the federal action and this action, we recount the relevant events that occurred during Wilmark's land use development application, which we derive from the summary judgment record in this case.
On April 28, 1998, Wilmark filed an application for development with the Township's Planning Board (the Board) seeking approval for a major subdivision on land designated on the Township's tax map as Block 25, Lots 43 and 50 (the Dreahook Property). Wilmark intended to develop the Dreahook Property under the Township's cluster zoning ordinance. Specifically, Wilmark elected to develop the Dreahook Property as residential, one and one-half acre open space clusters. Readington, N.J., Ordinance No. 403.6.1 required that open space in one and one-half acre cluster developments "be permanently deed restricted from further development except for recreation facilities approved by the Township Committee." The ordinance further provided that "[a]t the time of subdivision application the Township Committee shall be notified of the application and be offered the opportunity to accept the proposed open space for the Township."
On January 11, 1999, the Board adopted a resolution approving Phase I of Wilmark's development project. According to the resolution, Phase I "consist[ed] of 14 of the proposed 38 lots on the property." The resolution summarized the testimony of plaintiff's engineer, who explained the subdivision, as follows:
[Wilmark] seeks a major subdivision, consisting of 35 building lots on the preliminary plat plus one detention basin lot and on Block 50 Lot 43 there is a conceptual plat showing only one lot at this time with 5 possible proposed lots of 1.5 Ac. each as shown on pages 3 through 34 of the 9/20/98 revised plat. The property consists of approximately 189 acres of open space cluster subdivision. All lots will be conforming.
The board's "findings of fact" included the following references to open space in paragraphs 29 and 30:
29. . . . The proposed open space parcel includes 5.262 acres of open space for Lot 43 predicated upon 1.5 acre clustering.
. . . .
33. The Environmental Commission, in their written and public comments, opined that the
open space parcel to be dedicated to the Township was of an environmentally sensitive nature, in need of being protected by the "passive recreation" classification. The Board, in deliberation of this request, agreed to the classification of "Passive Recreation" being passed on to the governing body.
The resolution granted Wilmark's application "for preliminary major subdivision approval for [thirty-five] building lots, one open space parcel . . . and final major subdivision approval of Phase I consisting of [fourteen] lots . . . ." The open space parcel was to be designated Lot 50.
The Board's approval was "subject to [Wilmark's] express adherence" to specific terms and conditions. The condition concerning open space provided in pertinent part:
11. The open space parcel shall be presented to the governing body by the Application pursuant to Section 403.6.2(a) of the Land Development Ordinance of the Township of Readington for dedication in "fee title." If accepted, all open space shall be dedicated to the Township [of] Readington in a form acceptable to the Township attorney, Township engineer and governing body and pursuant to the Zoning Ordinance of the Township of Readington.
Thereafter, on January 24, 2000, the Board adopted a resolution granting final major subdivision approval to Wilmark. In its memorializing resolution, the Board stated explicitly that its approval was "subject to [Wilmark's] express adherence" to twelve conditions. One condition was that Wilmark amend its developer's agreement to provide for the dedication of the open space parcel to the Township "prior to the issuance of the 13th building permit for Phase II." Wilmark did not challenge the Board's decision by filing an action in lieu of prerogative writs in the Law Division.
On April 30, 2002, Wilmark transmitted to the Township a deed conveying the open space parcel. The transmittal letter, signed by Wilmark's attorney, stated that the deed was "being provided to the Township under protest." The letter referenced a federal lawsuit Wilmark and its president, Mark Hartman, had filed the same day, alleging that the Board had violated Wilmark's and Hartman's civil rights and "that the requested open space conveyance in [sic] unlawful." In the federal lawsuit, Wilmark and Hartman alleged, among other things, that the Township had taken their property without just compensation. They alleged that the Township had engaged in misconduct by, among other actions, "[r]equiring the mandatory deeding of open space to the Township or to approved non-profit organizations, N.J.S.A. 40:55D-44[.]"
On May 3, 2002, the Township's solicitor wrote to Wilmark's attorney, rejected the deed, and explained that a deed "proffered 'under protest,' and in conjunction with a lawsuit, is of absolutely no value to the Township, and, as such, we do not recognize it as evidence of compliance with the subdivision approval." The solicitor reminded Wilmark's attorney:
As your client well knows, this open space parcel was the subject of a land exchange with the New Jersey Water Supply Authority, a governmental entity, the intended purpose of which was to keep the property open to the public for open space passive recreation purposes under the same conditions as the Township would have. The Township is under contract to buy a small parcel elsewhere in the municipality from the Water Supply Authority needed in order to construct a bikeway/pedestrian access from the Lake Cushetunk development to Main Street. The Township received a grant from the State of New Jersey for a bikeway/walkway project to provide opportunities to cut down on traffic and provide recreation in the Township and solicited bids to do the construction. In addition to the Township's agreement to purchase the parcel owned by the Authority, the contract is contingent on the Township conveying the open space parcel from the Wilmark subdivision to the Water Supply Authority as part of a "land exchange". The Water Supply Authority's position has been that it must replace any open space it sells with additional open space, similar to the Green Acres program. The Township agreed to convey this piece (for no monetary consideration) in reliance on the development approval obtained by your client, the conditions of which were never protested until now.
In response, Wilmark's attorney wrote to the Township solicitor and explained that Wilmark was not seeking to rescind the deed:
As I indicated to you in my April 30, 2002 letter, Mark Hartman and Wilmark Building
Contractors have filed a lawsuit against the Township of Readington and others. This suit does not seek to rescind the open space conveyance that is the subject of the deed which accompanied my April 30th letter. Rather, the lawsuit seeks to recover damages predicated on substantive due process violations. Therefore, I am returning the deed to you along with my client's affidavit of title and corporate resolution. You are free to proceed with the land exchange with the Water Supply Authority, as we will not seek return of this land. We will, however, seek damages. If you choose not to proceed with the exchange, we ask that you arrange for the immediate issuance of building permits to my client. I have enclosed, for your review, a copy of our complaint which was returned by the Clerk's office today.
In June 2002, Wilmark and the Township signed a Development Agreement which stated in pertinent part:
[T]he Developer shall provide a Deed dedicating the open space to the Township or to the Township's assignee . . . prior to the issuance of the [thirteenth] building permit for Phase II. The Township intends to convey the property to the New Jersey Water Supply Authority as part of a purchase of lands owned by the Water Supply Authority to be used for public recreation purposes. If the Township does not close with the New Jersey Water Supply on such other property, the open space will instead be retained by the Township. In either event, the Deed to the open space shall state that it is to be designated for use as "passive recreation" because of the environmentally sensitive nature of the property. If necessary, the open space shall be accepted by ordinance and acceptance shall be subject to the receipt of a properly executed deed, affidavit of title, corporate resolution, and clear title as described above. The
developer shall continue to be responsible for taxes on the property until such time as the open space has been accepted by ordinance and the deed and all satisfactory evidence have been submitted, conveyed and accepted by the Township.
The Township did not record the deed during the six years Wilmark's federal lawsuit was pending, believing title was clouded by the federal action.
The federal court decided three motions relevant to this action. In an opinion dated August 15, 2006, the federal court denied Wilmark's summary judgment motion. The judge held that the Township's ordinance providing for the mandatory dedication of open space survived constitutional scrutiny under the Fifth Amendment. Hartman v. Twp. of Readington, No. 02-2017, 2006 U.S. Dist. LEXIS 60521, at *16-17 (D.N.J. 2006).
The federal judge also rejected Wilmark's argument that it had suffered cognizable damages as the result of the Township's invalid ordinance. The judge noted that the Township had conceded that its ordinances violated N.J.S.A. 40:55D-43(a), which "allow[s] for open space to be dedicated or made available to public use," provided such ordinances "shall not require" such a dedication to the municipality. Id. at *18. The court further noted that the Township had revised its ordinance to comply with the statute. Nevertheless, the judge rejected Wilmark's argument that it had suffered cognizable damages:
Even by excising the portions of the statute which [Hartman and Wilmark] object to as violating state law and giving the township an unlawful level of discretion, [Hartman and Wilmark] would still not be left with any ownership interest in the Open Space Parcel. Eliminating the mandatory granting of the Open Space Parcel to the Township and giving the developer the option to either grant the Open Space Parcel of the development (as the newly revised ordinance does) both eliminates the discretion in the Township . . . and brings the ordinance into compliance with governing state law. This would not, however, permit ownership of the open space parcel to remain with [Hartman and Wilmark]. The Plaintiffs, therefore, have failed to demonstrate any cognizable injury from the alleged statutory infirmities of the ordinance in effect at the time of the approval of their subdivision since they would neither be entitled to possession of, nor compensation for, the open space property were these alleged infirmities corrected.
[Id. at *21]
In an opinion issued on November 30, 2006, the federal court dismissed as time-barred by the applicable statute of limitations the claims Wilmark and Hartman had asserted against the Township under 42 U.S.C.A. § 1983. On June 20, 2008, the federal court dismissed the remaining counts in Wilmark and Hartman's amended complaint for failure to state a claim upon which relief could be granted. In a written opinion, the court reaffirmed its earlier decision "that the Township Ordinance requiring dedication of open space is constitutional." After explaining its reasons for so concluding, the judge addressed Wilmark and Hartman's argument that the mandatory dedication of open space was a taking. Rejecting that argument, the court explained:
New Jersey's Municipal Land Use Law allows township ordinances to require, as a condition of the approval of a planned development, that open space be set aside. N.J.S.A. 40:55D-39(c)(2); N.J.S.A. 40:55D-43. What cannot be required is an automatic dedication of that open space to the township; the open space may be owned and maintained by the residents of the development. N.J.S.A. 40:55D-43. This Court has already found the township ordinance requiring a dedication of open space to be constitutional. Therefore, under no circumstances did Plaintiffs have a right to keep the land in question. Where one does not have a right to the land, it is impossible for an unconstitutional taking to have occurred. Plaintiffs have therefore failed to show that they suffered an "injury in fact." See Lujan [v. Defenders of Wildlife], 504 U.S. [555,] 560 [(1992)].Defendants did not appeal the dismissal of their federal action.
Following the dismissal of defendants' federal action, the Township's litigation attorney wrote to its solicitor and stated that "a dismissal should facilitate the recording of the . . . open space deed." On March 16, 2009, the Township adopted an ordinance accepting dedication of the open space parcel and the deed. The Township was unable to record the deed, however, because Wilmark and Hartman refused to execute a Seller's Residency Certification. For that reason, the Township requested waiver relief from the New Jersey Division of Taxation. The Township provided Wilmark's attorney with a copy of its September 20, 2010 letter requesting the waiver. On September 29, 2010, Wilmark deeded the open space parcel to the Evergreen Trust II, Mark Hartman and Melinda McPhail, trustees.The trust had been created earlier that month. After Wilmark and Hartman refused to cooperate with the Township and vacate the deed to the trust, the Township filed its complaint in the Chancery Division on December 17, 2012.
Plaintiff states in its brief that McPhail is Hartman's wife. That assertion is unsupported by any citation to the record as required by Rule 2:6-2(a)(4).
In the Chancery action, the Township sought an order declaring that defendants had no "title to, nor interest in, nor lien or encumbrance upon" the open space parcel; a declaration that the Township had "a good and valid title to [the open space parcel]"; and other relief. In addition to Wilmark, Hartman, McPhail and the trust, the complaint also named as a party the New Jersey Department of Environmental Protection, Green Acres Program.
Defendants filed an answer and counterclaim. They alleged in their counterclaim that the Township "declined to accept the deed [conveying the open space parcel], did not record the deed, and never perfected the transfer" of the parcel from Wilmark to the Township. Defendants also asserted that the federal court held that the Township "could not require a dedication" of the open space. Defendants asserted that as a result of the federal court decision, they "agreed to accept re[-]conveyance of the open space and place it in a trust as permitted by the [Township's] Land Development Ordinance." Wilmark asserted that in reliance upon the Township's decision not to accept conveyance of the open space parcel, it placed the parcel in trust.
Following completion of discovery, the Township filed a summary judgment motion. Defendants filed a cross-motion for summary judgment. The trial court issued a written decision granting summary judgment to the Township and denying summary judgment to defendants.
The court first noted that N.J.S.A. 40:55D-43(a) expressly prohibited municipalities from requiring "as a condition of the approval of a planned development, that land proposed to be set aside for common open space be dedicated or made available to public use." Although finding that it was unlawful for the Township to make the dedication of the open space parcel a condition of approval of Wilmark's planned development, the court determined that the Township had "revised the ordinance to offer [Wilmark] the option to convey open space in a cluster development [either] to [the Township] or to a property owner's association." The court concluded that the Township had "rectified the ordinance's former non-compliance with the Municipal Land Use Law."
The court also determined that defendants' counterclaims were barred by the entire controversy doctrine. Rejecting defendants' assertion that they could not have brought their claim in the federal action because the Township had not accepted the deed to the open space parcel, the judge determined that defendants' "taking claim" in the federal action was based on the same premise as defendants' current counterclaim, namely, that the Township had no right of ownership to the open space parcel. The court explained that defendants' "taking" in the federal action and counterclaim in the current Chancery Division action "are based on the same set of facts involving the ordinance, conditional approval, and plaintiff/defendants' actions in transferring title to the open space parcel." The court concluded that "[i]f defendants wished to obtain an adjudication that plaintiff could not accept the deed, defendant should have pursued this claim in the federal litigation"; and that "[i]t simply is hairsplitting to claim that acceptance of the deed raises new issues beyond the rights regarding the conveyance adjudicated in federal court."
The court further explained that the entire controversy doctrine is equitable in nature and defendants had behaved inequitably. The court noted, among other things, that two months after the federal action began, Wilmark and Hartman signed a developer's agreement with the Township incorporating the terms of the Board's resolutions, including the condition that Wilmark convey the open space parcel to the Township, a condition that Wilmark never appealed. The court concluded, as a matter of law, that once Wilmark dedicated the open space parcel to the Township, the Township retained the power to accept the dedication and deed until it either rejected the deed or vacated the dedicated land.
The court also concluded that the Township accepted the deed when it adopted an ordinance on March 16, 2009, one and one-half years before Wilmark deeded the open space parcel to the Evergreen Trust. Lastly, the court rejected defendants' argument that Wilmark had been coerced into deeding the open space parcel to the Township.
II.
The summary judgment standard, which is set forth in Rule 4:46-2(c), requires trial courts to grant summary judgment when "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law"; see also Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 529-30 (1995). When a party appeals from a trial court order granting summary judgment, we "'employ the same standard [of review] that governs the trial court.'" Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010) (quoting Busciglio v. DellaFave, 366 N.J. Super. 135, 139 (App. Div. 2004)). Thus, we must determine whether there was a genuine issue of material fact, and if not, whether the trial court's ruling on the law was correct. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We review legal conclusions de novo. Henry, supra, 204 N.J. at 330.
Defendants contend the trial court erred by dismissing their claims under the entire controversy doctrine. We disagree. Although the trial court analyzed the entire controversy doctrine under state law rather than federal law, the analysis is essentially the same and the court's conclusion is correct.
The Supreme Court has settled "the question of what law governs the preclusive effect of a federal judgment in state court." Watkins v. Resorts Int'l Hotel & Casino, 124 N.J. 398, 411 (1991); see also Gannon v. Am. Home Products, 211 N.J. 454, 469 (2012). "[F]ederal principles must govern the preclusive effect of a federal judgment . . . ." Gannon, supra, 211 N.J. at 469.
"The [e]ntire [c]ontroversy [d]octrine is essentially New Jersey's specific, and idiosyncratic, application of traditional res judicata principles." Rycoline Prods. v. C & W Unlimited, 109 F.3d 883, 886 (3d Cir. 1997).
Federal law requires the same three basic elements as New Jersey law: (1) the judgment in the prior action must be valid, final, and on the merits; (2) the parties in the later action must be identical to or in privity with those in the prior action; and (3), the claim in the later action must grow out of the same transaction or occurrence as the claim in the earlier one.
[Watkins, supra, 124 N.J. at 412.]
The Court of Appeals for the Third Circuit has since held that claim preclusion applies when there is "(1) a final judgment on the merits in a prior suit involving (2) the same parties or their privies and (3) a subsequent suit based on the same cause of action." Duhaney v. Attorney General of the United States, 621 F.3d 340, 347 (3d Cir. 2010) (quoting In re Mullarkey, 536 F.3d 215, 225 (3d Cir. 2008)), cert. denied,. ___ U.S. ___, 131 S.Ct. 2961, 180 L.Ed. 2d 250 (2011). However, courts evaluate whether the claims arise out of the same transaction or occurrence in determining what constitutes the same cause of action. Id. at 348.
"Claim preclusion applies not only to matters actually determined in an earlier action, but to all relevant matters that could have been so determined." Ibid. (citing Angel v. Bullington, 330 U.S. 183, 192-93, 67 S. Ct. 657, 662, 91 L. Ed. 832, 838-39 (1947); Culver v. Ins. Co. of N. Am., 115 N.J. 451, 463 (1989)). Underlying the doctrines of claim preclusion is the policy "that fairness to the defendant and sound judicial administration require a definite end to litigation." Velasquez v. Franz, 123 N.J. 498, 505 (1991) (citing Restatement (Second) of Judgments § 19 comment a (1982); 1B James W. Moore et al., Moore's Federal Practice ¶ 0.405 (2d Ed. 1998)).
With those principles in mind, we turn to defendants' contention that the trial court erred by dismissing their affirmative defenses and counterclaim based on the entire controversy doctrine. Defendants first contend that the Township did not raise the doctrine as an affirmative defense, and consequently have waived it. The doctrine is indeed "an affirmative defense which is 'waived if not pleaded or otherwise timely raised.'" B.F. v. Div. of Youth & Family Servs., 296 N.J. Super. 372, 383 (App. Div. 1997) (quoting Brown v. Brown, 208 N.J. Super. 372, 384 (App. Div. 1986)). Although plaintiff should have included the entire controversy doctrine as an affirmative defense, the parties had ample opportunity to address the issue before the trial court. Moreover, "because judicial economy is only one consideration and such concerns cannot override the doctrine's overall objective of fairness to litigants," Oliver v. Ambrose, 152 N.J. 383, 403 (1998), and because the trial court addressed the merits of the doctrine, we choose to do so as well.
Defendants next argue that the federal action was not resolved on its merits. Defendants are incorrect. Wilmark and Hartman's third amended complaint was dismissed on defendants' motion to dismiss "pursuant to Federal Rule of Civil Procedure 12(b)(6)." Hartman v. Twp. of Readington, No. 02-2017 (SRC), 2008 U.S. Dist. LEXIS 48012, at *2, 8-10 (D.N.J. June 23, 2008). Although the merits of an action are typically decided at a trial, "[u]nder the principles of res judicata claims that are actually litigated and determined before trial also are barred from being re-litigated." Velasquez, supra, 123 N.J. at 506. "[A] motion to dismiss for failure to state a claim is an adjudication on the merits for res judicata purposes, unless the judge specifies that it is 'without prejudice.'" Id. at 507-8 (citing Federal Rule of Civil Procedure 41(b)) ("Unless the court in its order for [involuntary] dismissal otherwise specifies, a dismissal . . . other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication on the merits.").
The rule has since been amended, and now states: "Unless the dismissal order states otherwise, a[n] [involuntary] dismissal under this subdivision (b) and any dismissal not under this rule — except one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19 — operates as an adjudication on the merits." Fed. R. Civ. P. 41(b).
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In Wilmark and Hartman's federal action, the court stated explicitly: "this Court grants Defendants' motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), dismissing with prejudice Plaintiffs' Complaint in its entirety. Dismissal is with prejudice, because plaintiffs' pleadings . . . demonstrate that further amendment of the Complaint would be futile." Hartman, supra, 2008 U.S. Dist. LEXIS 48012 at *38.
Defendants next contend that the trial court should not have applied the entire controversy doctrine because their counterclaim had not accrued until after the federal court case was dismissed. They argue that until the Township accepted the deed, it could have rejected it, and then there would have been no violation of N.J.S.A. 40:55D-43(a). Defendants reason that until the dedication was accepted, neither Wilmark nor anyone else could contest that acceptance.
Defendants' argument is without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only the following. By its own admission, Wilmark never intended to seek return of the land from the Township. In its May 7, 2002 letter to the Township's counsel, Wilmark's attorney stated explicitly: "I am returning the deed to you, along with my client's affidavit of title and corporate resolution. You are free to proceed with the land exchange with the Water Supply Authority, as we will not seek return of this land" (emphasis added).
From that letter, it is clear that Wilmark never intended to seek rescission of the deed. Wilmark said so explicitly. Moreover, Wilmark was well aware that the Township intended to convey the open space parcel to the Water Supply Authority. It is clear from Wilmark's actions and express statements that it elected to pursue a federal court action for damages rather than seek rescission. Unless Wilmark's attorney made a deliberate misrepresentation to the Township's attorney, Wilmark would have taken no action to rescind the deed if, as Wilmark's counsel suggested it do, the Township proceeded to convey the open space parcel to the Water Supply Authority.
Moreover, it was Wilmark's federal court action and subsequent conduct following the dismissal of that action that prevented the Township from accepting and recording the deed. We are entirely unpersuaded by Wilmark's argument that it should somehow benefit from the Township's failure to accept the deed, when Wilmark's filing of the federal action and subsequent refusal to cooperate with the Township prevented the Township from accepting and recording the deed.
Defendants assert that "the underlying claim as to the validity of the Township's acceptance, the lawfulness of the Township's 2009 ordinance, or the Trust's entitlement to ownership were not adjudicated below." But these claims "grow out of the same transaction or occurrence as the claim[s]" Wilmark and Hartman asserted in the federal action. Watkins, supra, 124 N.J. at 412. The linchpin of defendants' claims is that the Township's ordinance conditioning development approval upon conveyance of the open space parcel to the Township violated the MLUL. Wilmark and Hartman raised that claim in federal court. The court addressed the issue and determined that "under no circumstances did Plaintiffs have a right to keep the land in question. Where one does not have a right to the land, it is impossible for an unconstitutional taking to have occurred." Hartman v. Twp. of Readington, supra, 2008 U.S. Dist. LEXIS 48012 at *21. Since Wilmark and Hartman had no right to keep the open space parcel, it had no right to convey it to the trust.
Moreover, when Wilmark and Hartman conveyed the open space parcel to the trust, they were fully aware that the Township had accepted the deed. They had taken no action to have a court rescind the deed after the Township accepted it. Because Wilmark and Hartman had no right to keep the open space parcel, and because both Wilmark and Hartman knew the Township had accepted the deed, their conveyance of the open space parcel to the trust was a nullity. They could not convey that which they did not own. Those conclusions derive directly from the holdings in the federal action.
We also reject defendants' claim that the entire controversy doctrine cannot bar the action against the trust because it was not a party to the federal litigation. Because Wilmark's attempt to convey the open space parcel to the trust was ineffective, and because the transfer was a nullity, the transaction was insufficient to undermine the equitable underpinnings of the entire controversy doctrine.
We have considered defendants' remaining arguments and determined that they are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF APPELLATE DIVISION