ABERLOUR AT NEWTON LLC v. TOWN OF NEWTON

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

ABERLOUR AT NEWTON, LLC,

Plaintiff-Appellant,

v.

TOWN OF NEWTON, a Municipal

Corporation of the State of

New Jersey,

Defendant-Respondent.

___________________________

Before Judges Fuentes, Simonelli and Fasciale.

On appeal from the Superior Court of New Jersey, Law Division, Sussex County, Docket No. L-0875-11.

John E. Ursin argued the cause for appellant (Schenck, Price, Smith & King, LLP, attorneys; Mr. Ursin and Sandra Calvert Nathans, on the briefs).

William E. Hinkes argued the cause for respondent (Hollander, Strelzik, Pasculli, Pasculli, Hinkes, Wojcik, Gacquin, Vandenberg & Hontz, LLC, attorneys; Mr. Hinkes, on the brief).

PER CURIAM

Plaintiff Aberlour at Newton, LLC appeals from the February 14, 2013 Law Division order, which granted summary judgment to defendant Town of Newton (Town), and ordered plaintiff to pay $125,000 for water and sewer connection fees and $12,000 for Affordable Housing Trust Fund fees (COAH fees). We affirm.

We derive the following facts from the record. In a March 2, 2004 Resolution, the Zoning Board of Adjustment of the Town of Newton (Board) granted a "d" variance to Aberlour, LLC (Aberlour I) for the construction of a building containing forty-five age-restricted condominium units. In a November 2, 2004 Resolution, the Board granted preliminary site plan approval and "c" and "d" variances for the proposed construction (the 2004 Resolution).

Pursuant to the 2004 Resolution, Aberlour I and the Town executed a Developer's Agreement, which required Aberlour I to pay $96,750 for water connection fees for forty-three units at the rate of $2250 for each connection, plus $172,000 for sewer connection fees at the rate of $4000 for each connection, for a total of $268,750. A payment of $143,750 for the first twenty-three water and sewer connections was due upon issuance of the first building permit. Thereafter, Aberlour I was to pay $6250 for combined water and sewer connections upon issuance of building permits for each remaining unit. Upon issuance of the first building permit in November 2005, Aberlour I paid $143,750, leaving a balance of $125,000, which was not recorded as a lien against the property.

The Developer's Agreement also required Aberlour I to pay COAH fees based on the following payment schedule:

First five units $ 16,000

Second five units $ 16,000

Third five units $ 16,000

Fourth five units $ 16,000

Fifth five units $ 16,000

Sixth five units $ 16,000

Seventh five units $ 16,000

Eighth five units $ 16,000

Ninth five units $ 12,000

Total $140,000

The payments were due when the Town issued the fifth certificate of occupancy for each of the nine five-unit groups. The COAH fees were not recorded as liens against the property.

If Aberlour I assigned, transferred, or sold the property, the Developer's Agreement provided as follows, in pertinent part:

Any assignment, transfer or sale of the subject property, or any part thereof, shall not operate to relieve Developer, its heirs, successors or assigns, from its obligations to complete the construction of all improvements required in this Agreement and the resolution of the Board to maintain the same for the two (2) year period of the maintenance guaranty. The Developer shall refer to this Developer's Agreement in any Deed transfer. Developer shall remain obligated to the Municipality for required site improvements. Finally, in the event of a transfer, all provisions of this Developer's Agreement along with terms of the resolution shall specifically run with the land and the covenants shall be enforceable by the Municipality should it become necessary or advisable for them to institute legal proceedings in order to enforce provisions of these documents. . . .

[(Emphasis added).]

The Developer's Agreement also provided that "[t]his Agreement shall be binding upon the successors and assigns of the parties signing it and each of the provisions of this Agreement shall have the same force and effect as if set forth at length as conditions of the grant of site plan approval." The Developer's Agreement was not recorded with the Sussex County Clerk's Office. In addition, Aberlour I recorded a master deed, which identified it as the "sponsor" or "developer" of the project. The master deed provided that anyone acquiring title to the units shall succeed to its rights.

On April 3, 2007, the Board granted final site plan approval. Thereafter, in October 2007, Aberlour I sought amended site plan approval and an amended "d" variance to modify the age restriction to non-age restricted. By that time, the building was completed, but the units were not.

In an October 2, 2007 Resolution, the Board granted amended site plan approval and an amended "d" variance, subject to certain conditions, including a "new" Developer's Agreement relative to any future improvements installed on the property. (the 2007 Resolution). The 2007 Resolution contained no provision nullifying the 2004 Resolution or Developer's Agreement, nor was there a provision requiring a "new" Developer's Agreement with respect to the construction that was already completed.

By June 2008, Aberlour I had sold only two units and had not obtained certificates of occupancy for the remaining forty-three units or the common elements. After defaulting on its mortgage, Aberlour I transferred title to the property to its lender via forty-three individual deeds in lieu of foreclosure to the lender's assignee, Classiclake Enterprises, LLC (Classiclake). The deeds did not reference the Developer's Agreement.

Plaintiff purchased the forty-three units in September 2010. Although the unpaid water and sewer connection and COAH fees were not recorded as liens against the property, the contract of sale required plaintiff to pay those fees. In addition, although the Developer's Agreement was not recorded, plaintiff's principal, John Maione, was aware of it prior to the purchase.

Following the purchase, plaintiff recorded a second amendment to the master deed, which identified plaintiff as the "successor sponsor" or "sponsor" of the project, and indicated that "the Sponsor desires to amend the Master Deed to reflect that [it] has assumed responsibility of sponsorship." As a result of assuming sponsorship of the project, plaintiff made certain changes to the master deed and certain amendments to the condominium association's by-laws.

In November 2011, the Town notified Maione of the $125,000 in unpaid water and sewer connection fees and $140,000 in unpaid COAH fees. Plaintiff paid $80,000 of the COAH fees and asked the Town to negotiate an addendum to the Developer's Agreement to reduce the $140,000 to $92,000. The Town refused to do so. Plaintiff then paid another $48,000, leaving a balance of $12,000 in unpaid COAH fees. Plaintiff did not pay the unpaid water and sewer connection fees.

In December 2011, plaintiff filed a complaint in lieu of prerogative writs, seeking to compel the Town to issue certificates of occupancy for the forty-three units. Plaintiff also sought a declaration that it was not the successor developer of the project and not bound by the Developer's Agreement. In an amended complaint, plaintiff also sought a declaration that it was not obligated to pay the COAH fees, and an order compelling reimbursement of the COAH fees it had paid. In its counterclaim, the Town sought $125,000 for the unpaid water and sewer connection fees and $12,000 for the unpaid COAH fees.

The parties filed motions for summary judgment. Plaintiff argued that the 2007 Resolution rendered the 2004 Resolution and Developer's Agreement null, void, and unenforceable, and there was no "new" Developer's Agreement as required by the 2007 Resolution. Alternatively, plaintiff argued it was not bound by the Developer's Agreement because it was not a successor developer contemplated by the agreement and the agreement was never validly assigned to it.

In a February 14, 2013 written opinion, Judge Thomas L. Weisenbeck made detailed factual findings and conclusions of law. The judge determined that the 2007 Resolution did not nullify or void the 2004 Resolution or require a "new" Developer's Agreement for anything other than future improvements. The judge found that the 2007 Resolution merely "supplanted" the 2004 Resolution by amending the site plan approval and "d" variance to remove the age restriction and change the parking lot set asides. Thus, the judge concluded that the Developer's Agreement remained valid and enforceable.

Addressing plaintiff's successor developer and assignment arguments, Judge Weisenbeck found that plaintiff completed the electrical and plumbing work, maintained the character of the development as non-age restricted housing instead of using it for another purpose; and "made full use of the . . . variance and age-restriction relief [Aberlour I] had obtained from the Town." Thus, the judge concluded that plaintiff was a successor developer and, under the Developer's Agreement, was responsible for payment of the water and sewer connection fees. The judge also concluded that the Developer's Agreement did not require an assignment because it specifically provided that the agreement ran with the land and the covenants were enforceable by the Town against either the original or a successor developer.

Judge Weisenbeck also determined that because plaintiff was responsible for payment of the water and sewer connection fees pursuant to the contract of sale with Classiclake, the non-recording of those fees as liens against the property did not absolve plaintiff of its responsibility. The judge also found that because building permits were not issued for the forty-three remaining units, those fees were not recordable as liens prior to plaintiff's purchase of the units.

Judge Weisenbeck further determined that plaintiff should have confirmed there were no fees because: the contract of sale required plaintiff to pay them; Classiclake obtained title to the units via deeds in lieu of foreclosure, which indicated the project was in financial distress; plaintiff was represented by counsel for the purchase; and Maione was "a sophisticated developer with experience in complex development projects." The judge also emphasized that Maione did not dispute he was aware of the Developer's Agreement prior to purchasing the units. Thus, he knew about the provisions requiring payment of the fees.

The judge relied on the reasons he had expressed to conclude plaintiff was responsible for payment of the COAH fees. In addition, the judge determined that the 2007 Resolution removing the age restriction did not nullify the COAH fees because there was nothing in any of the Resolutions or Developer's Agreement indicating that the fees were, as plaintiff argued, "a quid pro quo exaction for construction of age-restricted housing."

On appeal, plaintiff contends that Judge Weisenbeck erred in finding that it is: (1) bound by the Developer's Agreement to which it was neither a party nor assignee; (2) responsible for payment of the unpaid water and sewer connection fees despite the Town's failure to record either the Developer's Agreement or provide notice of the unpaid fees; and (3) responsible for COAH fees under the Developer's Agreement.

"We review de novo the grant or denial of a motion for summary judgment." Town of Kearny v. Brandt, 214 N.J.76, 91 (2013). "Summary judgment must be granted if 'the pleadings, depositions, answers to interrogatories and admissions on file, together with the 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.'" Ibid.(quoting R.4:46-2(c)). "The judge must decide whether 'the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.'" Ibid.(quoting Brill v. Guardian Life Ins. Co., 142 N.J.520, 540 (1995)).

We have considered plaintiff's contentions in light of the record and applicable legal principles and conclude they are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons Judge Weisenbeck expressed in his comprehensive and well-reasoned written opinion.

Affirmed.