MONMOUTH HILLS, INC. VS. LAURIE LECLAIR (L-2137-13, L-2138-13, AND L-2139-13 C-000117-11, C-000181-11, AND C-000112-12, MONMOUTH COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE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-4979-15T2
MONMOUTH HILLS, INC.,
Plaintiff-Respondent,
v.
LAURIE LECLAIR,
Defendant-Appellant.
______________________________
Argued December 13, 2018 – Decided August 9, 2019
Before Judges Simonelli, O'Connor and DeAlmeida.
On appeal from the Superior Court of New Jersey, Law
Division, Monmouth County, Docket Nos. L-2137-13,
L-2138-13 and L-2139-13, and Chancery Division,
Docket Nos. C-000117-11, C-000181-11 and C-
000112-12.
Larry S. Loigman argued the cause for appellant.
Gregg S. Sodini argued the cause for respondent
(Cutolo Barros LLC, attorneys; Gregg S. Sodini, on the
brief).
PER CURIAM
Defendant Laurie LeClair appeals from the April 3, 2013 and June 26,
2013 orders of the Chancery Division granting partial summary judgment in
favor of plaintiff Monmouth Hills, Inc. (MHI) in its action to collect common
area maintenance charges and fees, as well as the June 30, 2016 final judgment
of the Law Division dismissing LeClair's counterclaims against MHI and
awarding MHI damages, attorney's fees, and costs. We affirm.
I.
The following facts are derived from the record. LeClair is the owner of
residential property in the Monmouth Hills section of Middletown Township.
Monmouth Hills was created as a private community through the efforts of
several investors who, in 1895, formed Water Witch Club (Water Witch), a New
Jersey corporation. Water Witch purchased a track of land overlooking Sandy
Hook and New York City, which it subdivided and sold in forty-one parcels for
the construction of private residences. Purchasers of the parcels became
members of Water Witch through the issuance of shares in the corporation.
Water Witch retained ownership of the streets and other common property in the
development, including a clubhouse it constructed.
An August 4, 1944 amendment to Water Witch's certificate of
incorporation changed the corporation's name to MHI. On December 4, 1966,
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an amendment to MHI's certificate of incorporation changed the objectives of
the corporation, granting it, in relevant part, responsibility for the management,
administration, and maintenance of the common property of the community,
including the responsibility to pay local property taxes on the common property.
On June 24, 1972, MHI adopted bylaws authorizing and directing its board
of directors to establish maintenance charges and fees to be collected
periodically from homeowners for the privileges and services provided by the
corporation. The bylaws provide that all maintenance charges and fees shall be
collectible as a debt and shall be a lien on the relevant property. In addition, a
subsequent amendment to the bylaws provides that if MHI is compelled to seek
collection of unpaid maintenance charges and fees it is entitled to attorney's fees
and costs. MHI's bylaws were not recorded until 2011.
LeClair purchased her property on April 30, 2001. By purchasing the
property, LeClair became a member of MHI and obtained one share of stock in
the corporation. At the closing, she was issued a deed that stated that "[t]he land
and premises are conveyed SUBJECT to the Rules, Regulations and By-laws of
[MHI], a New Jersey Corporation." In addition, the deed contains a certificate
of compliance with the rules, regulations and bylaws of MHI.
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Almost immediately after purchasing her home, LeClair became involved
in the community, attended community meetings, and joined committees. She
was present at the annual meeting of the general membership of MHI on
December 9, 2001, at which a long-range planning report for the roads and other
infrastructure of the community was submitted and discussed. At the meeting,
the chairman of the road committee thanked LeClair for her help performing
work for the Committee.
In addition, within a year of purchasing the home, LeClair received and
paid an invoice from MHI for maintenance charges for the period July 1, 2001
to December 31, 2001. The invoice stated there was an increase in the annual
maintenance charges because of road maintenance and improvements and the
increase was approved at a special meeting of the membership of MHI. LeClair
admitted receiving periodic maintenance account summaries from MHI
beginning in January 2002, indicating expenses for road maintenance, snow
removal, and road capital improvements.
For many years thereafter, LeClair received periodic invoices from MHI
for maintenance charges. She paid the charges without objection. In addition,
LeClair was elected secretary of MHI and was intimately involved in corporate
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operations and decision making. During that time, she repeatedly relied on the
MHI bylaws and accepted the corporate structure and authority of MHI.
In 2007, LeClair stood for reelection to an MHI office. She was defeated.
Shortly after her election loss, LeClair stopped paying the periodic MHI
maintenance charges. Although LeClair continued to enjoy the services
provided by MHI, including the use of the roadways in the community, she
determined that MHI lacked the authority to assess charges for those services.
On November 4, 2010, and December 6, 2010, MHI filed notices of lien
against LeClair's property for unpaid maintenance charges and fees. On May 6,
2011, MHI filed a complaint against LeClair in the Special Civil Part seeking
collection of $8,632.84 in unpaid maintenance charges and fees. MHI also
sought the award of attorney's fees and costs. 1
On July 22, 2011, LeClair filed an answer and counterclaim denying
liability for the charges and fees and alleging: (1) because her property was not
part of a condominium regime, homeowners' association, or planned unit
development, MHI had no legal authority to exercise control over, or to assess
1
MHI filed similar collection actions against other property owners who did
not pay maintenance charges and fees. Those property owners filed answers and
counterclaims similar to those filed by LeClair. All of the complaints and
counterclaims were consolidated. Only the claims raised in the LeClair matter
are before us.
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charges and fees against, her or her property; (2) MHI's recorded liens against
her property were unauthorized and invalid and were intentional slander of her
title; and (3) MHI committed various acts of malfeasance and waste to the
detriment of its shareholders. LeClair sought a declaratory judgment that she
held title to her property free and clear of any assessments, fees, charges, liens,
or restrictions imposed by MHI; the appointment of a receiver for MHI; and the
award of damages, attorney's fees, and costs.
The trial court bifurcated the parties' claims. All equitable claims,
including the right of MHI to assess and collect charges and fees, and LeClair's
defenses with respect to MHI's assessment and collection of charges and fees,
were transferred to the Chancery Division. The remaining claims were
transferred to the Law Division. The trial court vacated, without prejudice, the
liens MHI filed against LeClair's property pending the determination of MHI's
authority to assess charges and fees against her.
A five-day evidentiary hearing was held in the Chancery Division on the
parties' cross-motions for summary judgment. Having heard the testimony of
LeClair and other witnesses, Judge Thomas W. Cavanagh, Jr., issued a
comprehensive oral opinion. The judge viewed LeClair's claims as "a dead-on
challenge to the existence of [MHI] and [its] right to exist and govern" and
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concluded: (1) MHI was duly incorporated and properly organized under the
laws of New Jersey; (2) LeClair received adequate notice of MHI's authority to
assess maintenance charges and fees against her, and her testimony that she
thought MHI was a social club was entirely lacking in credibility and was
contradicted by evidence adduced at trial, including the deed to her property,
her significant involvement in MHI's meetings and other activities, her election
and attempt at reelection to office at MHI, and her longtime payment without
objection of maintenance charges periodically assessed against her by MHI until
she lost reelection; and (3) MHI held title to the common property of the
development, including the streets, which it is responsible to maintain.
On April 3, 2013, Judge Cavanagh entered an amended order granting
summary judgment in favor of MHI with respect to its authority to assess and
collect maintenance charges and fees against LeClair. In addition, the amended
order entered judgment in favor of MHI and against LeClair in the amount of
$17,658.71. On June 26, 2013, Judge Cavanagh entered an order denying
LeClair's motion for reconsideration but modifying the April 3, 2013 order to
remove the award of a specified amount of damages to MHI, which the judge
found to have been prematurely entered. LeClair subsequently filed an amended
counterclaim alleging additional acts of malfeasance by MHI.
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After a six-day bench trial in the Law Division, Judge Katie A. Gummer
issued a thorough oral opinion in favor of MHI on all remaining claims. The
judge concluded that: (1) the witnesses called on behalf of LeClair were less
credible than the witnesses called on behalf of MHI; (2) the opinion of LeClair's
expert witness offered to prove corporate malfeasance by MHI was "utterly
lacking in credibility" and contradicted by evidence in the record; (3) LeClair
failed to prove that the MHI bylaws were not properly adopted; (4) a number of
LeClair's claims of corporate malfeasance were shareholder derivative claims
improperly alleged as individual shareholder claims and, therefore, subject to
dismissal; (5) even if those claims were not properly dismissed as shareholder
derivative claims, LeClair failed to prove malfeasance or a violation of the
business judgment rule; and (6) LeClair had not established an entitlement to
damages, the appointment of a receiver, or any other relief.
On June 30, 2016, Judge Gummer entered an order dismissing LeClair's
counterclaim, awarding MHI $18,786.96 in damages against LeClair for unpaid
maintenance charges, fees and interest, and awarding MHI $45,966.40 in
attorney's fees and costs.
This appeal followed. LeClair effectively repeats the legal arguments she
raised in the trial court. We stayed enforcement of the June 30, 2016 judgment.
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II.
We begin our analysis with LeClair's appeal of the April 3, 2013 and June
26, 2013 orders granting partial judgment to MHI. We review the trial court's
decision granting summary judgment de novo, using "the same standard that
governs trial courts in reviewing summary judgment orders." Prudential Prop.
& Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div. 1998). Rule
4:46-2(c) provides that a court should grant summary judgment when "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." "Thus, the movant must show that there does not exist
a 'genuine issue' as to a material fact and not simply one 'of an insubstantial
nature'; a non-movant will be unsuccessful 'merely by pointing to any fact in
dispute.'" Prudential, 307 N.J. Super. at 167 (quoting Brill v. Guardian Life Ins.
Co., 142 N.J. 520, 529-30 (1995)). We review the record "based on our
consideration of the evidence in the light most favorable to the parties opposing
summary judgment." Brill, 142 N.J. at 523-24.
Having carefully reviewed LeClair's arguments in light of the record and
applicable legal principles, we conclude that there is ample evidence supporting
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the trial court's findings of fact, conclusions of law, and award of partial
summary judgment to MHI. We therefore affirm the April 3, 2013 and June 26,
2013 orders for the reasons stated by Judge Cavanagh in his thorough and well-
reasoned oral opinion.
We turn to LeClair's appeal of the June 30, 2016 final judgment entered
after trial. We must defer to the judge's factual determinations, so long as they
are supported by substantial credible evidence in the record. Rova Farms Resort,
Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 483-84 (1974). "Appellate review
does not consist of weighing evidence anew and making independent factual
findings; rather, our function is to determine whether there is adequate evidence
to support the judgment rendered at trial." Cannuscio v. Claridge Hotel &
Casino, 319 N.J. Super. 342, 347 (App. Div. 1999). However, "[a] trial court's
interpretation of the law and the legal consequences that flow from established
facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp.
Comm. of Manalapan, 140 N.J. 366, 378 (1995).
We thoroughly reviewed LeClair's arguments in light of the trial record
and applicable legal principles and affirm the June 30, 2016 judgment for the
reasons stated by Judge Gummer in her thoughtful and well-reasoned oral
opinion. We also conclude that to the extent LeClair raises arguments before us
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that were not raised in the trial court those arguments are without sufficient merit
to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). In addition, we
generally will not consider issues that were not raised before the trial court and
that are not jurisdictional in nature or substantially implicate the public interest.
Zaman v. Felton, 219 N.J. 199, 226-27 (2014).
Affirmed. The stay of enforcement of the June 30, 2016 judgment is
vacated.
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