Court Opinion

ID: 4429943
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:32:59.150701+00
Date Added: 2024-06-11T14:23:17.003551
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NOT FOR PUBLICATION WITHOUT THE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 NOS. A-3873-16T3
                                                                    A-3919-16T3
FLEMINGTON FIELDS
CONDOMINIUM ASSOCIATION,
INC.,

          Plaintiff-Appellant,

v.

FLEMINGTON FIELDS
HOMEOWNERS ASSOCIATION,
INC.,

          Defendant-Respondent.

FLEMINGTON FIELDS
CONDOMINIUM ASSOCIATION,
INC.,

          Plaintiff-Respondent,

v.

FLEMINGTON FIELDS
HOMEOWNERS ASSOCIATION,
INC.,

          Defendant-Appellant.
            Argued October 15, 2018 – Decided November 30, 2018

            Before Judges Fasciale and Rose.

            On appeal from Superior Court of New Jersey, Law
            Division, Hunterdon County, Docket No. L-0163-15.

            Donald F. Scholl, Jr., argued the cause for appellant in
            A-3873-16 and respondent in A-3919-16 (Scholl,
            Whittlesey & Gruenberg, LLC, attorneys; Donald F.
            Scholl, Jr., on the briefs).

            Timothy P. Burns argued the cause for appellant in A-
            3919-16 and respondent in A-3873-16 (Robinson
            Burns, LLC, attorneys; Timothy P. Burns, of counsel
            and on the briefs; Colin R. Gibson, on the briefs).

PER CURIAM

      These two appeals, calendared back-to-back and consolidated for

purposes of this opinion, arise out of a complaint filed by plaintiff Flemington

Fields Condominium Association (COA) against defendant Flemington Fields

Homeowners Association (HOA), seeking past and prospective payments from

the HOA for certain amenities shared by both associations in their common

development, and counsel fees and costs. The HOA appeals from a summary

judgment order obligating it to contribute financially to the storm water

management basin (basin or pond), and a post-trial judgment establishing the

percentage of HOA's contribution, while COA appeals from an order denying

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its application for fees and costs. For the reasons that follow, we affirm the Law

Division orders.

                                        I.

      We derive the factual background and procedural history from the record

on appeal. Located in Raritan Township, Flemington Fields is an age-restricted

residential development, which is divided into 142 condominium units and 86

single-family homes. The COA governs the condominium units; the HOA

governs the single-family homes.

      The crux of this appeal implicates the common elements located in an area

of the development containing the condominium units. Those elements were

constructed by Raritan Valley Developers, Inc. During the timeframe in which

the developer held a majority presence on the boards of each association, both

entities contributed to the operation and maintenance of the pond and other

elements. Pursuant to the Public Offering Statement (POS), drafted by the

developer, the HOA's contribution toward the pond was allocated at thirty-eight

percent, based on the ratio of the number of HOA units to the total combined

units within the development. In 2014, when the developer transitioned control

to each association, the HOA ceased making payments. However, HOA owners

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continued to use the clubhouse until the COA barred them from doing so in

2016.

        In the interim, the COA filed its complaint.       Following a period of

discovery, the COA moved for partial summary judgment as to liability and

damages, and the HOA cross-moved for summary judgment to dismiss count

four of the COA's complaint, which sought counsel fees and costs.

        On September 1, 2016, the trial judge granted the COA's motion in part,

limited to the COA's obligation to contribute to the operating and maintenance

expenses of the pond. In rendering his decision, the trial judge observed the

pond "was constructed as part of the initial planning and design of this combined

community[.]" The judge elaborated:

                    [I]t [i]s undeniable that the [HOA] and [its]
             individual members, the individual property owners are
             beneficiaries of the storm water management system.
             Their storm water undisputably, a large percentage of
             it, runs off through piping and drainage designs . . . into
             the pond apparently that [is] located on the [COA]'s
             property.

                    So, there is no way to undo it. There is no way
             to deny that the [HOA] homeowners enjoy the benefits
             of the storm water management system[.]

        To support his decision, the judge cited the Declaration, which "the

[HOA] acknowledge[d] is a document that [it is] bound by." Pursuant to the

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terms of the Declaration, "common property" includes "any easement or other

right which may now or hereafter be granted for the benefit of the Owners for

access to or use of property (or for any other purpose) not included within the

Development[.]"

      However, the judge denied COA's motion pertaining to the HOA's

obligation to contribute toward other shared amenities, including the gazebo,

clubhouse, lawn maintenance and snow removal; and the HOA's percentage of

allocation for future fees. The judge also denied, without prejudice, the HOA's

cross-motion pertaining to fees and costs.

      On February 16, 2017, the trial judge denied, with prejudice, the COA's

motion for counsel fees and professional fees. 1      The judge observed that,

generally, a prevailing litigant is not entitled to counsel fees except where fee

shifting is authorized by contract or statute. The judge then rejected the COA's

argument that the underlying intent of the governing documents and the

Condominium Act, N.J.S.A. 46:8B-1 to -38 (Act), supported the fee award

sought by the COA in this litigation.

1
   During oral argument before us, the COA conceded there exists no legal
support for the COA's claimed professional fees, i.e., costs associated with
hiring the accountant and engineer who testified on behalf of the COA at trial.
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      A non-jury trial was held on two consecutive days in March 2017. The

COA presented testimony of three witnesses, including its engineering expert,

Thomas R. Decker, P.E., while no witnesses testified on behalf of the HOA. On

April 7, 2017, the judge awarded the COA damages in the amount of $29,580.15

"for arrears for certain amenities that . . . [d]efendant has received the beneficial

use of, up and through the trial date of March 8, 2017." The judge further

ordered the HOA to pay forty-one percent "of all the [future] expenses, including

in particular, operating expenses, deferred maintenance and capital reserve costs

for the [pond][.]" These appeals followed.

      Initially, the HOA appeals, in part, from the September 1, 2016 order

granting partial summary judgment to the COA. The HOA primarily contends

its governing documents are silent as to the basin and do not obligate the HOA

to contribute financially to the basin's maintenance and repair. As such, the

HOA maintains the judge erred in determining the HOA benefitted from an

implied easement for the pond, and other amenities, including the gazebo,

clubhouse and parking area. 2

2
  Because the trial judge did not grant summary judgment with respect to
contribution toward those other amenities, we decline to consider that aspect of
HOA's argument in our opinion.
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        Secondly, the HOA also appeals from that portion of the April 7, 2017

judgment fixing its percentage contribution for prospective payments at forty -

one percent. The HOA argues the judge improperly permitted evidence from

Decker regarding his formula for contribution, which differed from the thirty -

eight percent figure that was utilized before the respective boards assumed

control of the development.

        In its appeal, the COA contends the trial judge erred in denying its

application for counsel fees and professional fees because the Act and the

relevant governing documents authorize recovery of fees in an enforcement

action for unpaid assessments.     The COA also argues it is a third-party

beneficiary of the governing documents that authorize the recovery of counsel

fees.

                                      II.

                                      A.

        We first consider the HOA's argument that the judge erred in granting

partial summary judgment. "[W]e review the trial court's grant of summary

judgment de novo under the same standard as the trial court." Templo Fuente

De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199

(2016).    Thus, we consider "whether the competent evidential materials

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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." Davis v. Brickman Landscaping, Ltd., 219 N.J.

395, 406 (2014) (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." DepoLink Court Reporting & Litig.

Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App. Div. 2013) (internal

quotation marks and citation omitted). We accord no deference to the trial

judge's conclusions on issues of law. Nicholas v. Mynster, 213 N.J. 463, 478

(2013). Guided by these principles, we conclude that summary judgment was

properly granted.

      Specifically, New Jersey adheres to the general rule that "[t]he beneficiary

of an easement . . . has a duty to the holder of the servient estate to repair and

maintain the portions of the servient estate and the improvements used in the

enjoyment of the servitude[.]" Lake Lookover Prop. Owner's Ass'n v. Olsen,

348 N.J. Super. 53, 67 (App. Div. 2002) (quoting Restatement (Third) of Prop.:

Servitudes § 4.13 (Am. Law Inst. 2000)). In that case, the owners of property

surrounding an artificially constructed lake appealed from an order requiring

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similarly situated property owners to contribute to the cost of repairing and

reconstructing a dam on the lake. Id. at 54. The defendants' lakeside lots were

created when the developers constructed the dam in question, which in turn,

created the lake. Id. at 54-55. The court held "the several property owners hold

'separate easements' in the same servient estate (Lake Lookover) and thus have

a duty to each other to contribute to the cost of repairs and maintenance that are

required to preserve that lake." Id. at 67.

      Further, it is well-settled that a "quasi-easement" may be created by

implication. Leach v. Anderl, 218 N.J. Super. 18, 24-25 (App. Div. 1987). A

quasi-easement is established by "the apparent use of the quasi-servient portion

of the estate for the quasi-dominant portion, the continuous nature of the use,

the permanent character of the quasi-easement, and its reasonable necessity to

the beneficial enjoyment of the dominant portion." Id. at 26 (citation omitted).

The continuous and permanent nature of an implied easement refers to both "the

continuity of enjoyment . . . as well [as] the permanence of the quasi-easement

in its impliedly intended adaptation to the dominant and servient tenements."

A.J. & J.O. Pilar, Inc. v. Lister Corp., 38 N.J. Super. 488, 498 (App. Div. 1956),

aff'd, 22 N.J. 75 (1956) (noting that a "hidden pipe or drain may . . . be deemed

an apparent [use]").    Additionally, the easement need only be "reasonably

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necessary to the proper enjoyment of the dominant tenement . . . not absolutely

necessary." Ibid.

      Having considered the HOA's arguments in light of the record and

controlling legal principles, we affirm, substantially for the reasons expressed

in the judge's cogent oral opinion. The HOA's arguments are without sufficient

merit to warrant discussion in our opinion. R. 2:11-3(e)(1)(E). We add only the

following brief comments.

      In addition to the definition of "common property," the Declaration also

provides: "Regardless of whether title to the Common Property . . . is held by

. . . the [HOA], the [HOA] shall, at all times, have the duty, responsibility and

obligation to undertake any and all efforts necessary to administer, operate,

maintain, repair and replace the Common Property . . . ." Thus, read as a whole,

the governing documents support the trial judge's determination that an implied

easement was created from the benefits derived by the HOA members whose

storm water "runs off through piping and drainage designs . . . into the pond"

situated on the COA's property.

      In sum, the judge aptly recognized the creation of an implied easement "at

a minimum" is "a simple matter of common sense and logic." His decision is

fully supported by the case law. In particular, the HOA benefitted from an

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implied easement, the use of which was continuous, permanent, and reasonably

necessary to the HOA's use of its property. Leach, 218 N.J. Super. at 26.

Because the HOA derived a benefit from the storm water management system,

it is obligated to contribute toward the pond's maintenance and related expenses.

                                       B.

      We next address the HOA's argument that the trial judge erred in

permitting the COA to present evidence reallocating the HOA's percentage. The

HOA contends the COA was judicially estopped from presenting evidence at

trial that the percentage of prospective assessments should be calculated at a

forty-one percent contribution, as determined by Decker. Instead, the HOA

claims the COA is bound by the thirty-eight percent formula, set forth in the

POS. The HOA's argument is unavailing.

      We have recognized that in order to protect the integrity of the court

system, "[w]hen a party successfully asserts a position in a prior legal

proceeding, that party cannot assert a contrary position in subsequent litigation

arising out of the same events." Kress v. LaVilla, 335 N.J. Super. 400, 412

(App. Div. 2000). The doctrine of judicial estoppel may bar a claim if: (1) a

party currently advocates a position contrary to a position it previously

advocated; (2) the party successfully convinced the court to accept its pr ior

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position; and (3) the party's inconsistent behavior will result in a miscarriage of

justice. Kimball Int'l, Inc. v. Northfield Metal Prods., 334 N.J. Super. 596, 606-

08 (App. Div. 2000).

      Here, the trial judge accepted the COA's position regarding the thirty-

eight percent formula for the HOA's arrears because "both boards essentially

agreed with . . . the formula that the developer had initially proposed."

Accordingly, the judge determined the parties were bound by the thirty-eight

percent formula "[until] the respective boards took over control of the

development." Thereafter, however, the parties "were entitled to disagree [about

the percentage formula] once they had control."

      In reaching his decision, the trial judge cited a provision of the Act and

case law that prohibits developers from entering into long-term management

contracts.   See N.J.S.A. 46:8B-12.2 (providing that certain management

contracts shall not exceed two years in duration); Brandon Farms Prop. Owners

Ass'n v. Brandon Farms Condo. Ass'n, 180 N.J 361, 373 (2004) (holding that a

condominium association properly refused to enforce a management agreement

created by the developer before the association came into existence).

Accordingly, the judge determined, "The POS is an expired document that is not

binding on the HOA . . . forever." Thus, the judge found the COA was within

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its rights to "seek a judicial declaration in the absence of an agreement between

the two boards for a determination of the [HOA]'s [prospective] percentage

responsibility for storm water management costs."

      Moreover, the record fully supports the judge's findings. In arriving at the

forty-one percent allocation, the judge determined, "Decker's formula is a more

reasonable, more accurate basis for allocating the storm water management

expenses." In doing so, the judge found Decker credible observing, "His opinion

was based on sound engineering and mathematical principles." Notably, the

HOA's expert, who did not testify, did not disagree with Decker's methodology.

      For the foregoing reasons, we decline to apply the doctrine of judicial

estoppel here, where the "prior position" was not exclusively that of the COA,

but rather the prior percentage formula was contained in the POS, which applied

to both boards. See Kimball Int'l, Inc., 334 N.J. Super. at 606-08. Because the

judge's determination regarding the HOA's percentage share of prospective

contribution is supported by substantial, credible evidence in the record, we

decline to disturb it. See Rova Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65

N.J. 474, 484 (1974) (according deference to the trial judge's findings, as long

as they are supported by substantial credible evidence).

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                                        III.

      Lastly, we turn to the COA's appeal from the order denying its request for

counsel fees. The COA maintains a fee award is warranted by court rule, the

Act and its governing documents. We disagree.

      It is well-settled that "New Jersey disfavors the shifting of attorneys' fees."

Litton Indus., Inc. v. IMO Indus., Inc., 200 N.J. 372, 385 (2009) (citing N.

Bergen Rex Transp., Inc. v. Trailer Leasing Co., 158 N.J. 561, 569 (1999)). For

this reason, New Jersey has long-adhered to the American Rule, "which provides

that litigants must bear the cost of their own attorneys' fees." Innes v. Marzano-

Lesnevich, 224 N.J. 584, 592 (2016). Our Supreme Court has recognized "[t]he

purposes behind the American Rule are threefold: (1) unrestricted access to the

courts for all persons; (2) ensuring equity by not penalizing persons for

exercising their right to litigate a dispute, even if they should lose; and (3)

administrative convenience." Ibid. (alteration in original) (quoting In re Niles,

176 N.J. 282, 294 (2003)). Reflecting this state's strong public policy against

shifting of counsel fees, Rule 4:42-9 creates the presumption that "[n]o fee for

legal services shall be allowed[,]" except in certain enumerated circumstances,

such as by statute or court rule. Id. at 592-93 (first alteration in original).

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                                        14
      Initially, we note the Act provides for fee-shifting under certain

circumstances:

            a. The association shall have a lien on each unit for any
            unpaid assessment duly made by the association for a
            share of common expenses or otherwise, including any
            other moneys duly owed the association, upon proper
            notice to the appropriate unit owner, together with
            interest thereon and, if authorized by the master deed or
            bylaws, late fees, fines and reasonable attorney's fees[.]

            [N.J.S.A. 46:8B-21.]

      The COA acknowledges that its action does not pertain to the filing of a

lien, nor an individual unit owner within the association, but nevertheless

contends that the statute, when read as a whole, encompasses a homeowners'

association within its definition of "unit owner." Because an association is both

a "person" and a "representative body of its unit owners," the COA argues it is

entitled to counsel fees incurred to recover the unpaid assessments from the

HOA. Further, the COA contends that had it sued to recover such expenses in

an enforcement action against one of its unit owners, it would have been able to

recover counsel fees. Accordingly, the COA argues it should be permitted to

recover in an enforcement proceeding against its sister association.

      The COA's argument is misplaced. As the trial judge correctly found,

"[t]he statute does [not] clearly apply to this particular circumstance." The

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                                       15
COA's overly expansive interpretation runs contrary to the underlying intent of

the statute because the COA is not a "unit owner," which is defined as "the

person or persons owning a unit in fee simple." N.J.S.A. 46:8B-3(q). The

statute also defines "association" as "the entity responsible for the

administration of a condominium, which entity may be incorporated or

unincorporated." N.J.S.A. 46:8B-3(b). Further, the statute defines "unit" as "a

part of the condominium property designed or intended for any type of

independent use[.]" N.J.S.A. 46:8B-3(o). Clearly, in defining each term, the

legislature intended to distinguish an association from its unit owners.

      Moreover, when interpreting statutes, courts must follow well-established

rules of construction. "The goal of all statutory interpretation 'is to give effect

to the intent of the Legislature.'" Maeker v. Ross, 219 N.J. 565, 575 (2014)

(quoting Aronberg v. Tolbert, 207 N.J. 587, 597 (2011)). A court "first look[s]

to the statutory language, which generally is the 'best indicator' of the

Legislature's intent." Ibid. (quoting DiProspero v. Penn, 183 N.J. 477, 492

(2005)). Extrinsic sources, such as legislative history are considered "[o]nly if

the language of the statute is shrouded in ambiguity or silence, and yields more

than one plausible interpretation . . . ." Ibid. Further, when interpreting a statute

where "the Legislature has clearly defined a term, the courts are bound by that

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definition." Febbi v. Bd. of Review, Div. of Emp't Sec., Dep't of Labor & Indus.,

35 N.J. 601, 606 (1961). Finally, a court considers "not only the particular

statute in question, but . . . the entire legislative scheme of which it is a part."

Kimmelman v. Henkels & McCoy, Inc., 108 N.J. 123, 129 (1987).

      Here, prior to adopting N.J.S.A. 46:8B-21, the Senate reasoned:

            This bill would provide statutory authority for
            provisions found in condominium association master
            deeds and by-laws that allow for the imposition of
            reasonable fines on unit owners who fail to comply with
            the master deed, by-laws, or rules and regulations of the
            condominium. The bill also specifically indicates that
            condominium associations may include provisions in
            their master deeds or by-laws for the imposition of late
            fees upon unit owners who fail to pay monies duly owed
            the association after proper notice.

            [S. Comm. Statement to A.B. 465 (May 2, 1996)
            (emphasis added).]

      Although we do not find the statute ambiguous, the legislative history

underscores the statutory intent to afford a condominium association a

mechanism to enforce its rules and regulations against non-compliant unit

owners. To the extent the association incurs counsel fees in connection with

such enforcement measures, counsel fees may be assessed against offending unit

owners. There is no indication, however, that the legislature intended to extend

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this enforcement mechanism to an action brought by one association against

another.

      We therefore agree with the trial judge and decline to "extend the intent

of the condominium statute" to the COA's claim for fees against the HOA. See

State v. Perry, 439 N.J. Super. 514, 523 (App. Div. 2015) (recognizing a court

should interpret a statute according to "its ordinary meaning and construe it in a

common-sense manner").

      Secondly, although Rule 4:42-9 does not include contracts within its eight

exceptions under which attorneys' fees may be awarded, the rule does not

preclude parties from agreeing to fee-shifting provisions, and a party may be

contractually obligated to pay counsel fees. Satellite Gateway Commc'ns, Inc.

v. Musi Dining Car Co., 110 N.J. 280, 285-86 (1988). When fee-shifting is

prescribed by contract, "the [relevant] provision should be strictly construed in

light of [the] general policy disfavoring the award of attorneys' fees." Litton,

200 N.J. at 385 (citing N. Bergen, 158 N.J. at 570).

      Relevant here, Article VI of the Declaration provides, in pertinent part:

            Each assessment and all fines and other charges
            assessed against a Lot or its Owner shall be deemed a
            continuing lien upon the Lot against which they were
            assessed or the Lot owned by the Owner against whom
            they were assessed and shall also be the joint and
            several personal obligation of the Owner(s) of such Lot

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            at the time when the assessment, fine or other charge
            fell due and of each subsequent record Owner of such
            Lot, together with such interest thereon and the cost of
            collection thereof (including reasonable attorney[s']
            fees). Liens for unpaid assessments, fines or other
            charges may be foreclosed by suit brought in the name
            of the [HOA] in the same manner as a foreclosure of a
            mortgage on real property.

            [(Emphasis added).]

      In considering the application of those governing documents, the trial

judge aptly recognized that they "do [not] really control this type of a situation."

The judge reasoned, "There was nothing that put the [HOA] on notice that [it

was] going to be responsible for counsel fees if [it] failed to prevail in this

litigation." (Emphasis added). Although the HOA unit owners were on notice

that attorneys' fees could be imposed in a legal action to recover delinquencies

on assessments, that provision did not provide notice that the individual owner

could be liable for counsel fees in the present case.

      Having reviewed the arguments raised by the COA in light of the record

on appeal and applicable law, we conclude that the judge did not abuse his

discretion in denying the COA's application for counsel fees and costs. See

Brunt v. Bd. of Trs., Police & Firemen's Ret. Sys., Div. of Pensions & Benefits,

455 N.J. Super. 357, 362 (App. Div. 2018). We therefore find no basis to disturb

the judge's findings.

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      To the extent not addressed, the COA's remaining points lack sufficient

merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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