ROBINHOOD PLAZA, INC. VS. CITY COUNCIL OF THE CITY OF JERSEY CITY(L-5825-10, HUDSON COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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.
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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.
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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.
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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.
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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
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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)
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(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
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(1965) (quoting 405 Monroe Co. v. City of Asbury Park, 40 N.J.
457, 463 (1963)).
Affirmed.
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