SAVAGE MILLS ENTERPRISES LLC v. THE WOMAN'S EXCHANGE OF MONMOUTH COUNTY INC.
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5030-16T4
SAVAGE MILLS ENTERPRISES,
LLC, a New Jersey Limited
Liability Company,
Plaintiff-Appellant/
Cross-Respondent,
v.
THE WOMAN'S EXCHANGE
OF MONMOUTH COUNTY,
INC., a New Jersey Not-For-
Profit Corporation,
Defendant-Respondent/
Cross-Appellant.
______________________________
Argued December 4, 2018 – Decided December 14, 2018
Before Judges Sabatino and Haas.
On appeal from Superior Court of New Jersey,
Chancery Division, Monmouth County, Docket No. C-
000191-16.
Gregory R. Milne argued the cause for appellant/cross-
respondent (Foss, San Filippo & Milne, LLC, attorneys;
Gregory R. Milne, of counsel and on the briefs; Roger
J. Foss and John B. Anderson, III, on the briefs).
Steven C. Backfisch argued the cause for
respondent/cross-appellant (Lindabury, McCormick,
Estabrook & Cooper, PC, attorneys; Steven C.
Backfisch, of counsel and on the brief; Christopher J.
Reilly, on the brief).
PER CURIAM
Plaintiff Savage Mills Enterprises, LLC appeals from the Chancery
Division's June 23, 2017 judgment, granting defendant The Woman's Exchange
of Monmouth County, Inc.'s motion for summary judgment, and dismissing
plaintiff's complaint. In that complaint, plaintiff sought a declaration that a
provision of a lease between the parties was unenforceable, and an order
requiring defendant to "sign an application for a partial exemption from real
property taxes" on plaintiff's property. Defendant has filed a cross -appeal from
the provision of the judgment that denied its request for attorneys' fees. For the
reasons that follow, we affirm the court's dismissal of plaintiff's complaint, but
reverse and remand for consideration of defendant's application for attorneys'
fees.
The facts, as derived from the evidence submitted by the parties in support
of, and in opposition to, their respective summary judgment motions, are
A-5030-16T4
2
undisputed and fully detailed in the trial judge's oral decision. Therefore, we
recite only the most salient facts here.
Defendant is a registered non-profit, New Jersey corporation. In 1956, it
purchased a property in Little Silver, where it has owned and operated a non-
profit gift shop ever since. Because it was a charitable organization, defendant's
property was exempt from local property taxes.
In 1985, defendant agreed to sell its entire property to Talbots, Inc.
(Talbots), which operated a nationwide chain of retail stores. Pursuant to the
sales contract, Talbots agreed to build a new building on the property for
defendant's sole use1 and, pursuant to a separate bill of sale, Talbots granted all
ownership rights in this building to defendant.2
Talbots also entered into a ninety-nine-year ground lease agreement with
defendant, whereby it leased the land on which the new building would be
erected to defendant for $1 a year, with an option to renew for another ninety-
nine-year term at the same rental price. In Paragraph 6 of the lease, Talbots
agreed, as the lessor, to "pay and discharge all existing and future taxes,
1
After the new building was built, defendant moved its store to it and its old
shop was demolished.
2
Talbots built a larger building on the site and used it to operate its retail store.
A-5030-16T4
3
assessments, duties, impositions, and burdens assessed, charged, or imposed,
upon [defendant's] Building and the Land."3
Defendant and Talbots also negotiated a provision in the lease to ensure
that defendant would be able to continue to operate its store in the event Talbots
later sold the property to a third party during the lease term. This provision, set
forth in Paragraph 22, stated:
The Lessor shall warrant and defend the Lessee
in the enjoyment and peaceful possession of the old
[store] Building until its destruction and the Land and
the new [store] Building during the term of this Lease.
The Lessor shall give the Lessee written notice of any
sale of the Property, which said sale shall be subject to
this Lease and the rights of [defendant] therein and to
the new [store] Building. The Lessor must obtain the
written approval of the Lessee with respect to said sale;
however, said written consent shall not be unreasonably
withheld by the Lessee.
In other words, Talbots and defendant agreed that the lease would survive
any sale of the property to a new owner. Talbots, as the lessor, further promised
to give defendant prior notice of any such sale. While the sale could not move
3
As the lessor, Talbots agreed in Paragraph 14 of the lease to maintain fire and
personal liability insurance for defendant's building and, under Paragraph 10, to
pay for the costs of all exterior repairs. Defendant was responsible for paying
all utilities, and the costs of interior maintenance and repairs under Paragraphs
9 and 11 of the agreement.
A-5030-16T4
4
forward without defendant's written consent, the lease specifically stated that
defendant's consent could not be "unreasonably withheld." 4
In 2000, Talbots advised defendant that it was going to sell the property
to plaintiff, which planned to use Talbots' building to house and operate a
furniture store. Defendant asked to review plaintiff's financial records to
determine if it had the financial wherewithal to maintain the property and ensure
that defendant could continue to operate its shop in accordance with the lease.
In October 2000, plaintiff filed a complaint against defendant in the Chancery
Division, alleging that defendant was unreasonably withholding its consent to
the sale under Paragraph 22 of the lease.
Plaintiff, defendant, and Talbots promptly settled their dispute after
plaintiff's owner stipulated that she had a net worth of $2.5 million, and plaintiff
and Talbots agreed to make a $30,000 charitable contribution to plaintiff. The
parties further agreed that these conditions, together with the other terms set
forth in their settlement agreement, would not constitute precedent in connection
4 Paragraph 7 of the lease permitted defendant to vacate the building and
discontinue its operations. If this occurred, Talbots agreed to purchase
defendant's lease and the building either at a price negotiated between the lessor
and defendant, or pursuant to a procedure set forth in Paragraph 7. Under
Paragraph 24, defendant could also assign or sell the lease.
A-5030-16T4
5
with any future sale of the property by plaintiff.5 Talbots then consummated the
sale of the property to plaintiff, subject to the terms of defendant's lease. 6
Over the next thirteen years, plaintiff operated its furniture store in its
building and defendant continued to maintain its gift shop. Each party fully
complied with the terms of defendant's lease.
In October 2014, however, plaintiff challenged the property tax
assessment on the property set by the Borough of Little Silver (Borough). It
also applied for a partial tax exemption on the grounds that a portion of the
property was being used by defendant, a non-profit corporation. Prior to
submitting that application, plaintiff asked defendant to fill out a form
requesting the exemption. Defendant declined to do so, pointing out that it was
not responsible for paying any of the property taxes on the property under
5
Specifically, the February 5, 2001 agreement stated "that assuming that
[plaintiff's owner's] claim to a net worth of [$2.5 million] is accurate, such net
worth is a satisfactory financial condition at this time in today's dollars . . . [t]o
require the reasonable consent of [defendant] under the lease to the conveyance
[of the property by Talbots to plaintiff] without any separate payment or
financial security." The agreement stated that the $30,000 charitable
contribution was "not a precedent or a condition to future considerations of what
constitutes an acceptable purchaser of the subject property under the lease."
6
Plaintiff paid Talbots $910,000 for the property.
A-5030-16T4
6 Paragraph 6 of its lease and, in any event, had not been charged or assessed any
taxes by the Borough for which it could legally seek an exemption.
The Borough's assessor denied the partial exemption claim because
plaintiff was "not a tax exempt organization[,]" and defendant was "not legally
responsible for the real estate taxes levied on the property[.]" Plaintiff appealed
the assessor's decision, and its overall tax assessment to the County Board of
Taxation, which affirmed the assessment and the denial of the partial tax
exemption. Plaintiff then filed a complaint in the Tax Court, arguing that the
assessment exceeded the property's true value and that it was entitled to a partial
exemption because it was leasing a portion of the property to defendant, a non-
profit charitable organization.
In a published opinion, the Tax Court denied plaintiff's request for a
partial tax exemption, and held that plaintiff was clearly a for-profit entity and,
as such, was not entitled to a tax exemption merely because its tenant, defendant,
was a non-profit corporation. Savage Mills Enters. v. Borough of Little Silver,
29 N.J. Tax 295 (Tax 2016). In so ruling, the court found that N.J.S.A. 54:4-
3.6, upon which plaintiff relied in support of its claim for a partial exemption,
clearly stated that "'if any portion of a building used for' a charitable purpose 'is
leased to profit-making organizations,' then the exemption is limited to 'only' the
A-5030-16T4
7
non-leased portion." Id. at 306. Thus, "the plain language of the statute grants
partial exemption where the lessor (landlord) is the tax-exempt entity and the
lessee/tenant is a for-profit lessor, not the converse." Ibid.
The Tax Court also noted that the Borough had "neither imposed tax upon,
nor sought to collect tax from" defendant, and that plaintiff had "assumed the
entire burden of the taxes on the portion of the [property] owned and occupied
by" defendant. Id. at 308-09. With particular relevance to the present appeal,
the court also concluded that defendant's "lack of appeal or claim for a partial
exemption does not require a conclusion that plaintiff, as fee owner of the
[property], is foreclosed from filing the same." Id. at 305. Thus, because
plaintiff could not comply with the requirements of the statute be cause it was
itself a for-profit corporation, plaintiff was simply not entitled to a partial tax
exemption under N.J.S.A. 54:4-3.6.7
After receiving the Tax Court decision, plaintiff filed a two-count
complaint against defendant in the Chancery Division. In count one, plaintiff
asserted that Paragraph 22 of the lease was "an unreasonable restraint on
7
The Tax Court did not address plaintiff's challenge to its overall property tax
assessment in its decision and, instead, scheduled that issue for trial. Id. at 309.
The record on appeal does not reveal either the status or outcome of that
proceeding.
A-5030-16T4
8
alienation" of the property and, as a result, it sought to "[e]njoin[] . . .
[d]efendant from enforcing its rights under" this provision, and a declaration
that Paragraph 22 was "invalid and unenforceable." 8 In count two, plaintiff
claimed that defendant breached the implied covenant of good faith and fair
dealing in the lease by not completing and signing an application for a partial
exemption from real property taxes, or cooperating with plaintiff's attempt to
secure this partial exemption for itself.
Plaintiff and defendant soon filed cross-motions for summary judgment,
with both parties seeking an award of counsel fees under Paragraph 23 of the
lease. That paragraph broadly states that "[i]n the event of any judicial
proceeding in connection with the enforcement of this [l]ease, the prevailing
party shall be entitled to recover reasonable attorneys' fees from the defeated
party, as fixed by the [c]ourt."
Because there was no dispute as to any of the material facts, the trial judge
concluded that the legal issues raised were appropriately addressed on the
parties' cross-motions for summary judgment. As correctly framed by the trial
8
Plaintiff alleged that it wanted to sell the property, but the few prospective
buyers it was able to attract revoked their offers after learning of the terms of
plaintiff's lease with defendant.
A-5030-16T4
9
judge, the issue to be resolved under count one was whether the restraint on
alienation contained in Paragraph 22 of the parties' lease was reasonable. 9 The
legal principles governing the proper adjudication of that issue are well
established.
While "New Jersey recognizes the public policy that restraints on the
alienation of property are generally disfavored[,]" such restraints will be upheld
when they are reasonable. Cape May Harbor Vill. & Yacht Club Ass'n, Inc. v.
Sbraga, 421 N.J. Super. 56, 71-72 (App. Div. 2011). "Reasonableness is
determined by weighing the utility of the restraint against the injurious
consequences of enforcing the restraint." Id. at 72 (quoting Restatement (Third)
of Prop.: Servitudes, § 3.4, cmt. g (Am. Law Inst. 2000)).
"Various factors bear on the reasonableness of a restraint on alienation."
Id. at 71. When evaluating the specific facts surrounding the restraint, the
presence of the following factors will support a finding of reasonableness:
1. the one imposing the restraint has some interest
in land which he is seeking to protect by the
enforcement of the restraint;
2. the restraint is limited in duration;
3. the enforcement of the restraint accomplishes a
worthwhile purpose;
9
Plaintiff did not seek to terminate defendant's lease.
A-5030-16T4
10
4. the type of conveyances prohibited are ones not
likely to be employed to any substantial degree
by the one restrained.
5. the number of persons to whom the alienation is
prohibited is small;
6. the one upon whom the restraint is imposed is a
charity.
[Ibid. (quoting Restatement of Prop. §406, cmt. i (Am.
Law Inst. 1944) (citation omitted); accord Restatement
(Third) of Prop.: Servitudes, § 3.4, cmt. c.]
However, courts have found that
the following factors tend to support the conclusion that
the restraint is unreasonable:
1. the restraint is capricious;
2. the restraint is imposed for spite or malice;
3. the one imposing the restraint has no interest in
land that is benefited by the enforcement of the
restraint;
4. the restraint is unlimited in duration;
5. the number of persons to whom alienation is
prohibited is large.
[Id. at 71-72 (quoting Restatement of Prop., § 406, cmt.
i) (citation omitted)); accord Restatement (Third) of
Prop.: Servitudes, § 3.4, cmt. c.]
A-5030-16T4
11
When, as here, the restraint is included in a lease, and the lease requires
that one of the parties consent to the alienation of the property by the other party,
it is important to determine whether the restraint specifically states that consent
cannot be unreasonably withheld. This is so because our courts have long
recognized the validity of such provisions regardless of whether the proposed
transfer must be approved by the landlord or the tenant. As we stated almost
forty years ago:
If the lease specifically provides that the landlord or the
tenant will not withhold his consent to a proposed
transfer by the other party unreasonably, the other party
has options not available if such obligation is merely
imposed by operation of law. Such specific provision
in the lease is a promise and upon its breach[,] the other
party will be entitled to all the remedies available for a
breach of a promise . . . , including the right to terminate
the lease.
[Ringwood Assocs., Ltd. v. Jack's of Route 23, Inc.,
166 N.J. Super. 36, 44 (App. Div. 1979) (citations
omitted) (quoting Restatement (Second) of Prop., §
15.2, cmt. h (Am. Law. Inst. 1977)).]
Applying these principles to the specific facts of this case, the trial judge
rendered an oral opinion and found that the restraint contained in Paragraph 22
of the lease was reasonable. The record amply demonstrates that defendant
obviously had an interest in the property, the building it owned, and its continued
ability to operate its store as it had for decades on the site. Thus, the restraint
A-5030-16T4
12
plainly served the "worthwhile purpose" of allowing this charitable organization
to continue its mission. Cape May, 421 N.J. Super. at 71.
While the restraint would run for the entire ninety-nine-year lease term,
and could possibly be extended for another ninety-nine years, it could not be
exercised unreasonably. Paragraph 22 specifically barred defendant from
unreasonably withholding its consent to a sale of the property, thus limiting its
right as a tenant to prevent any transfer. Paragraph 22 did not prevent plaintiff
from attempting to convey the property to any particular class of possible
buyers. It had the opportunity to sell it to anyone with defendant's consent, and
defendant's consent could not be unreasonably withheld. Ibid.
At the same time, the restraint in Paragraph 22 was not capricious on its
face, and it was not "imposed for spite or malice[.]" Id. at 72. As the judge
noted, plaintiff did not have a buyer for the property and, when it did, Paragraph
22 would not permit defendant to unreasonably object to the proposed sale.
Accordingly, the judge found that Paragraph 22 was valid.
Turning to count two of plaintiff's complaint, the judge noted that the Tax
Court had already determined that plaintiff was not entitled to a partial tax
exemption. Therefore, the judge found that plaintiff's argument had been
rendered moot. In addition, the Tax Court held that plaintiff was not eligible for
A-5030-16T4
13
a tax exemption because it was a for-profit company. Thus, it would not have
mattered if defendant had submitted a request for a partial tax exemption; the
Borough had not assessed or charged any property taxes to defendant, and
plaintiff was contractually obligated to pay these taxes, as it had since it
purchased the property in 2001.
The trial judge denied defendant's request for attorneys' fees under
Paragraph 23 of the lease. The judge noted that this provision was "rather
expansive" because it stated that the prevailing party was entitled to fees "[i]n
the event of any judicial proceeding in connection with the enforcement of [the]
lease[.]" However, the judge stated that this action was "not the enforcement of
the lease. This was an action to determine the validity of the lease. So I will
not grant counsel fees in this case." This appeal and cross-appeal followed.
We first address plaintiff's appeal. Plaintiff asserts that the judge erred by
declining to invalidate Paragraph 22 of the lease as an unreasonable restraint on
alienation. It also argues that defendant breached its duty of good faith and fair
dealing by refusing to cooperate with plaintiff's request for a partial tax
exemption on the property. 10 We disagree.
10
"[E]very contract in New Jersey contains an implied covenant of good faith
and fair dealing." Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 420
A-5030-16T4
14
Our review of a ruling on summary judgment is de novo, applying the
same standard as the trial court, namely, the standard set forth in Rule 4:46-2(c).
Conley v. Guerrero, 228 N.J. 339, 346 (2017). Thus, we consider, as the trial
judge did, 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." Town of Kearny v. Brandt, 214 N.J. 76, 91 (2013) (quoting Brill
v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)). If there is no
genuine issue of material fact, we must then "decide whether the trial court
correctly interpreted the law." Prudential Prop. & Cas. Co. v. Boylan, 307 N.J.
Super. 162, 167 (App. Div. 1998). We accord no deference to the trial judge's
conclusions on issues of law and review issues of law de novo. Nicholas v.
Mynster, 213 N.J. 463, 478 (2013).
The judge properly found that the restraint on alienation set forth in
Paragraph 22 was reasonable under the idiosyncratic circumstances of this case.
Defendant wished to continue to operate its store in order to maintain its
(1997). Under this "implied covenant . . . 'neither party shall do anything which
will have the effect of destroying or injuring the right of the other party to
receive the fruits of the contract.'" Palisades Props., Inc. v. Brunetti, 44 N.J. 117, 130 (1965) (quoting 5 Williston on Contracts § 670, at 159-60 (3d ed.
1961)).
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15
charitable mission. For this reason, Talbots and defendant negotiated the lease
to enable that to occur, while at the same time protecting Talbots and any
subsequent lessor from any unreasonable exercise of the restraint by defendant.
To exercise the restraint by refusing to consent to a transfer of the property,
defendant had to act reasonably. If the lessor or a prospective buyer disagreed
with defendant's action, they could secure a prompt judicial ruling on the
question of whether defendant had unreasonably withheld its consent. In
addition, the lessor would be able to recover its attorneys' fees if it prevailed
under Paragraph 23 of the lease. As recognized by our courts for many years,
leases routinely include provisions, like Paragraph 22, that require a landlord or
tenant's consent to a sale of a property, provided that this consent is not
unreasonably withheld. Ringwood Assocs., 166 N.J. Super. at 44. Therefore,
we conclude that Paragraph 22 was a reasonable restraint on alienation under
the unique facts of this case. 11
11
As previously noted, restraint on alienation cases are extremely fact sensitive.
Thus, the cases relied on by plaintiff in support of its arguments on appeal are
all factually distinguishable from the matter at hand. For example, the restraints
involved in Brace v. Black, 51 N.J. Super. 572, 581-84 (App. Div. 1958), and
Ross v. Poneman, 109 N.J. Super. 363, 365-69 (Ch. Div. 1970), were invalid
because they required that a property first be offered to certain persons at a
below market value, fixed price before the owner could otherwise sell it. Courts
have also invalidated restraints that prevented the sale of property to anyone
A-5030-16T4
16
We also agree with the trial judge that plaintiff's arguments concerning
the partial tax exemption it sought were moot. "A case is moot if the disputed
issue has been resolved, at least with respect to the parties who instituted the
litigation." Caput Mortuum, L.L.C. v. S&S Crown Servs., Ltd., 366 N.J. Super.
323, 330 (App. Div. 2004). Here, by the time plaintiff filed its complaint, the
Tax Court had already determined that plaintiff was not entitled to a partial tax
exemption because it rented a portion of the property to defendant. Savage Mills
Enters., 29 N.J. Tax at 306. As our Supreme Court has also made clear, a partial
tax exemption is simply not available where all of the benefits flow "from [the
non-profit] to the for-profit entities." Int'l Sch. Servs., Inc. v. W. Windsor Twp.,
207 N.J. 3, 25 (2011). Thus, the partial tax exemption issue was both moot and
meritless.
who was not a member of a residential community association, Mountain
Springs Ass'n of N.J., Inc. v. Wilson, 81 N.J. Super. 564, 569 (Ch. Div. 1963),
or a member of a beach club, Tuckerton Beach Club v. Bender, 91 N.J. Super. 167, 169 (App. Div. 1966). None of these factual scenarios were present in this
case. Plaintiff's reliance on Drachenberg v. Drachenberg, 142 N.J. Eq., 127, 128
(E. & A. 1948) is also misplaced. The restraint in that case prevented the sale
of a deceased family member's property if her five children did not unanimously
consent. Id. at 130-31. Unlike in the present case, however, the restraint did
not include a provision requiring that consent could not be unreasonably
withheld. Id. at 128.
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Moreover, defendant was not responsible for paying any of the property
taxes on the property, including on the land where its building was located. The
Borough had never even assessed any taxes to defendant. Thus, defendant could
not request an exemption, or join in requesting an exemption, from a tax that it
was under absolutely no obligation to pay. Therefore, defendant did not breach
the implied covenant of good faith and fair dealing under the terms of the lease.
Finally, we address defendant's cross-appeal. Defendant contends that the
judge erred by denying its request for attorneys' fees under Paragraph 23 of the
lease. We agree.
"New Jersey strictly adheres to the 'American rule' in regards to attorney's
fees[,]" under which each party bears its own legal fees and costs. First Atl.
Fed. Credit Union v. Perez, 391 N.J. Super. 419, 425 (App. Div. 2007) (citing
Van Horn v. City of Trenton, 80 N.J. 528, 538 (1979)). "Consistent with this
policy, attorney's fees are not recoverable absent express authorization by
statute, court rule or contract." Ibid. (citing Dep't of Envtl. Prot. v. Ventron
Corp., 94 N.J. 473, 505 (1983)). Attorney "fee determinations by trial courts
will be disturbed only on the rarest of occasions, and then only because of a
clear abuse of discretion." Packard-Bamberger & Co. v. Collier, 167 N.J. 427,
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18
444 (2001) (internal quotation mark omitted) (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).
In this case, the parties provided for the award of counsel fees in
Paragraph 23 of their lease contract. This provision stated that "[i]n the event
of any judicial proceeding in connection with the enforcement of this [l]ease,
the prevailing party shall be entitled to recover reasonable attorneys' fees from
the defeated party, as fixed by the [c]ourt." (emphasis added). For the following
reasons, we conclude that the judge mistakenly exercised her discretion by
determining that "[t]his was an action to determine the validity of the lease[,]"
rather than a "judicial proceeding in connection with the enforcement of [the]
[l]ease[.]"
In so ruling, we acknowledge that when the parties provide for the award
of attorneys' fees in a contract, "courts will strictly construe that provision in
light of the general public policy disfavoring the award of attorneys' fees." N.
Bergen Rex Transp., Inc. v. Trailer Leasing Co., 158 N.J. 561, 570 (1999).
However, Paragraph 23 plainly and unambiguously states that fees should be
granted to the prevailing party "[i]n the event of any judicial proceeding in
connection with the enforcement of this [l]ease[.]" Just as clearly, this was
A-5030-16T4
19
obviously an action brought "in connection with the enforcement of" Paragraph
23 of the lease.12
In this regard, plaintiff specifically sought in count one of its complaint
to "enjoin[] . . . [d]efendant from enforcing its rights under [Paragraph] 22 of
the [l]ease[,]" and a declaration that Paragraph 22 was "invalid and
unenforceable[.]" (emphasis added). Similarly, in count two, plaintiff alleged
that defendant breached the implied covenant of good faith and fair dealing by
not cooperating with its attempt to obtain a partial tax exemption on the
property. As relief for this breach, plaintiff clearly sought to enforce this
implied covenant in the lease by requiring defendant to sign the exemption
application and work with plaintiff to secure the exemption.
Thus, it cannot be disputed that under the broad language of Paragraph 23,
this was a "judicial proceeding in connection with the enforcement of" the lease.
It is equally undisputed that defendant fully prevailed on all of the issues
involved in this enforcement action. Therefore, the judge should have
considered defendant's request for attorneys' fees. Because this did not occur,
12
We note in passing that the reciprocal nature of the fee-shifting provision can
operate as a disincentive for defendant to take an unreasonable position in
withholding consent to a sale to a new owner.
A-5030-16T4
20
we are constrained to reverse this portion of the court's order and remand for
further proceedings concerning defendant's request for fees. 13
In sum, we affirm the trial court's order granting summary judgment to
defendant and dismissing plaintiff's complaint with prejudice. We reverse the
portion of the order denying defendant's request for reasonable attorneys' fees
and remand for further proceedings on that issue. On remand, the trial court
shall have jurisdiction to consider any application by defendant for appellate
fees. See R. 2:11-4.
Affirmed in part; reversed in part; and remanded for further proceedings.
We do not retain jurisdiction.
13
In its reply brief, plaintiff claims for the first time that defendant should have
been barred from receiving attorneys' fees as the prevailing party because it did
not file a counterclaim seeking these fees. Because plaintiff did not raise this
argument before the trial court, we decline to consider it. Nieder v. Royal
Indemn. Ins. Co., 62 N.J. 229, 234 (1973).
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21
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