Court Opinion

ID: 4176662
Source: CourtListenerOpinion
Date Created: 2017-06-12 13:12:22.892746+00
Date Added: 2024-06-11T14:55:08.077830
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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-1070-15T2
ROBINHOOD PLAZA, INC.,
INTERNATIONAL CHAIN ENRICO
CORP., and AVNER NETTER,

        Plaintiffs-Respondents,

v.

CITY COUNCIL OF THE CITY
OF JERSEY CITY,

     Defendant-Appellant.
______________________________

              Submitted April 24, 2017 – Decided June 9, 2017

              Before Judges Sabatino, Currier, and Geiger.

              On appeal from the Superior Court of New
              Jersey, Law Division, Hudson County, Docket
              No. L-5825-10.

              Jeremy Farrell, Corporation Counsel, attorney
              for appellant (Jason T. Watson and Chaunelle
              Robinson, Assistant Corporation Counsels, on
              the brief).

              Kates Nussman Rapone Ellis & Farhi, LLP,
              attorneys for respondents (Michael B. Kates
              and Cara F. Landolfi, on the brief).

PER CURIAM

        Defendant City Council of the City of Jersey (City) appeals

from the October 6, 2015 order that granted plaintiffs', Robinhood
Plaza, Inc., International Chain Enrico Corp., and Avner Netter,

(collectively plaintiffs) motion to enforce litigant's rights.

The City argues that the settlement agreement entered into between

the parties was ultra vires, and therefore, unenforceable.          We

disagree and affirm.

     Plaintiffs own properties on West Street located in the

Journal Square area of Jersey City.       In August 2010, the City

adopted   an   ordinance,    entitled   the   Journal   Square   2060

Redevelopment Plan (plan).     In pertinent part, the plan altered

the zoning of plaintiffs' properties by reserving a portion of the

property in Zone 2 as "open space" and restricting another portion

of plaintiffs' property in Zone 4, "neighborhood mixed use," to

buildings of no more than eight stories and up to 130 feet in

height.   Other commercial property in the Journal Square core,

designated as Zone 3     "commercial center" permitted buildings as

high as twenty-five stories and 265 feet.

     Plaintiffs filed a complaint in lieu of prerogative writs in

October 2010, challenging the legality of the plan, and contending

that the "downgrade of zoning" it suffered under the redevelopment

plan violated the Local Redevelopment and Housing Law (LRHL),

N.J.S.A. 40A:12A-1 to -73, and its constitutional rights under

federal and state law.

                                  2                          A-1070-15T2
      After two years of negotiations, the parties entered into a

settlement agreement (Agreement) in July 2012.        Plaintiffs "agreed

to donate the land in Zone 2 to Jersey City for a public park, set

aside a portion of [its] property for a pedestrian plaza, and

create   a   24-hour   publicly   accessible   pedestrian   easement    and

walkway on [its] property."       In exchange, the City agreed to re-

zone a portion of plaintiffs' properties to allow the construction

of buildings with greater height and stories, and to vacate all

sections of West Street adjacent to plaintiffs' properties.             The

Agreement was incorporated into a consent order dismissing the

complaint    without    prejudice,   pending     implementation   of    the

executory terms of settlement – an amendatory ordinance by the

City and the dedication of land to the City by plaintiffs.              The

court retained jurisdiction for the limited purpose of enforcing

litigant's rights.

     To achieve its obligations under the Agreement, plaintiffs

subsequently     expended   approximately      $182,000   for   "planning,

architectural,     area     surveying,   legal,     environmental,      and

miscellaneous costs" and entered into three separate contracts for

the sale of property in the West Street area totaling $26 million.

In November 2012, the City adopted an ordinance which amended the

redevelopment plan to create a new zone (Zone 11) that allowed for

buildings of greater height on plaintiffs' properties.

                                     3                             A-1070-15T2
      In January 2015, the City introduced another ordinance to

vacate the agreed upon portions of West Street as required under

the Agreement.        When the proposed ordinance met opposition from

members   of    the   public,    the    City    Council    tabled   it   and   then

unanimously voted against the ordinance.

     Plaintiffs filed a motion to enforce litigant's rights, Rule

1:10-3, asking the court to compel the City to adopt the ordinance

and comply with its obligations under the Agreement to vacate

sections of West Street.         Plaintiffs contended that the agreement

was enforceable as a valid contract; in addition, the doctrine of

equitable      estoppel   barred     defendant     from    not   fulfilling    its

obligations under the agreement in light of the extensive actions

taken and expenses incurred by plaintiffs to satisfy their part

of the bargain.

     In response, the City argued that the settlement agreement

was "ultra vires[] because it contain[ed] agreements for future

Council action and such a condition impermissibly restricts the

legislative      function   of   a     future    Council    which   renders    the

agreement void ab initio."             The City further contended that the

doctrine of equitable estoppel could not be used to force the

passage of an ordinance vacating West Street, as the doctrine is

rarely applied against a municipality and cannot be applied if an

agreement is ultra vires.

                                         4                                A-1070-15T2
       Following three days of hearings on the motion, Judge Barry

P. Sarkisian issued an order and comprehensive written decision

on October 6, 2015, granting plaintiffs' request to enforce the

Agreement.1

       In rejecting defendant's argument that the Agreement was an

ultra vires contract and void ab initio, the judge noted that

under      the   LRHL,      a    municipality        has       the   power     to    adopt    a

redevelopment plan.             The statute authorizes the City "to make and

execute contracts and other instruments necessary and convenient

to   the    exercise     of      the   powers      of    the    agency    or   authority."

N.J.S.A.     40A:12A-22.           Judge     Sarkisian         found   that    defendant's

zoning concessions to plaintiffs in the Agreement were "directly

related to its authority to adopt a redevelopment [plan] and enter

into    contracts      to       effectuate    its       purpose"     of   redeveloping        a

specific area under the LRHL.

       The judge dismissed defendant's jurisdictional challenge,

stating that the Agreement "unambiguously provides that this Court

retains     jurisdiction          'for   the       limited      purpose      of     enforcing

litigant's rights, if needed.'"                     Finally, the judge concluded

that, in the alternative, equitable estoppel was warranted in

light of the extensive costs plaintiffs had incurred in its

1
  An amended opinion was issued on December 17, 2015 with minor
changes.

                                               5                                      A-1070-15T2
reliance on the Agreement and the substantial future losses of $26

million it would sustain if the ordinance were not passed. Judge

Sarkisian concluded that plaintiffs had suffered a "'manifest

injustice' due to the voluntary conduct of [d]efendant in failing

to vacate West Street in accordance with the [Agreement]."

     On appeal, the City argues that the trial judge erred in

concluding that the actions of a prior municipal council could

bind the legislative functions of subsequent municipal councils.

The City reiterates that the settlement agreement was ultra vires,

and contends that equitable estoppel may not be enforced against

a municipality.

     Our review of a judge's conclusions of law is de novo.

Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366,

378 (1995) ("A trial court's interpretation of the law and the

legal   consequences   that   flow   from   established   facts   are   not

entitled to any special deference.").

     We have reviewed the arguments presented by defendant in

light of the applicable principles of law and find them to be

without merit.    We affirm substantially for the reasons expressed

by Judge Sarkisian as reflected in his well-reasoned written

opinion.   We add only the following comments.

     The LRHL empowers a municipal governing body to adopt a

redevelopment plan.    N.J.S.A. 40A:12A-4.      In furtherance of that

                                     6                             A-1070-15T2
plan, a municipality is authorized to exercise all those public

and essential governmental functions necessary to effectuate the

purposes of the LRHL, including entering into "all contracts

. . . [it deems] necessary or incidental to the performance of" a

redevelopment     plan.    N.J.S.A.        40A:12A-22.     Here,    the    City

determined that the greater Journal Square area was "in need of

rehabilitation" and it adopted a redevelopment plan.               Subsequent

to plaintiff challenging the plan in a court action, the parties

settled the litigation by entering into an Agreement that modified

the City's redevelopment plan.         Defendant's actions in resolving

the litigation and modifying its plan were authorized under the

LRHL, and therefore, not ultra vires.

     The    City's   argument   that   the    Agreement    wrongfully     bound

future city councils is similarly without merit.           Where authorized

by statute, a municipality can "undertake obligations or limit its

powers."    Town of Secaucus v. City of Jersey City, 20 N.J. Tax
562, 570 (2003).     The LRHL grant of authority to municipal bodies

to "exercise all those public and essential governmental functions

necessary    or   convenient    to   effectuate"    a    redevelopment     plan

permitted the city to enter into the Agreement.                See N.J.S.A.

40A:12A-22; See also N.J.S.A. 40A:12A-8(f) (conferring the ability

to arrange or contract with public agencies for the planning

. . . or undertaking of any project or redevelopment work) and (n)

                                       7                              A-1070-15T2
(providing    municipal      bodies   the   ability   to   "[d]o    all    things

necessary to carry out its powers").

     The LRHL recognizes that by their very nature, redevelopment

projects require many years to come to fruition. N.J.S.A. 40A:12A-

39(e) allows a municipality to "enter into agreements which[] may

extend over any period, notwithstanding any provision or rule of

law to the contrary, with a . . . redevelopment entity . . .

respecting action to be taken by such public body pursuant to any

of the powers granted by this act."               The plan at issue here

specified it was to remain in effect for a period of fifty years.

It, therefore, would be illogical to conclude that an agreement

entered into by a city council in 2012 would not extend beyond

that council's term.

     In light of our affirmance of Judge Sarkisian's ruling that

the Agreement was not ultra vires and must be enforced, we need

not reach the issue of whether equitable estoppel is available

under these circumstances.        We note without further comment that

equitable    estoppel   is    "rarely   invoked   against    a     governmental

entity," Middletown Twp. Policemen's Benevolent Ass'n Local No.

124 v. Twp. of Middletown, 162 N.J. 361, 367 (2000) (citations

omitted), although the remedy may be warranted "where the interests

of justice, morality and common fairness clearly dictate that

course."    Palisades Properties, Inc. v. Brunetti, 44 N.J. 117, 131

                                        8                                 A-1070-15T2
(1965) (quoting 405 Monroe Co. v. City of Asbury Park, 40 N.J.
457, 463 (1963)).

    Affirmed.

                              9                        A-1070-15T2