AMERICAN DREAM AT MARLBORO, LLC VS. PLANNING BOARD OF THE TOWNSHIP OF MARLBORO(L-1909-07, BURLINGTON 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NOT FOR PUBLICATION WITHOUT THE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-0547-15T2
AMERICAN DREAM AT
MARLBORO, LLC,
Plaintiff-Respondent,
v.
PLANNING BOARD OF THE
TOWNSHIP OF MARLBORO, and
THE MAYOR AND TOWNSHIP
COUNCIL OF THE TOWNSHIP
OF MARLBORO,
Defendants-Respondents,
and
PATRICIA CLEARY,
Defendant/Intervenor-
Appellant,
and
ALBERT W. RUDEL, JOANNE LIU
RUDEL, IMRICH VERDON, DANUTA
VERDON, VICTOR WAHABA, LAURA
WAHABA, R. DURAIPANDIYAN, L.
APPUKUTTAN, MORRIS KAPLAN,
CLIFFORD SNEYERS, LESLIE
SNEYERS, LILY Y. CHAO, MICHAEL
G. MEYERS, MICHELLE A. MYERS,
ROBERT G. OBEROSLER, PATRICIA P.
OBEROSLER, KWAKU BOAMAH, ESTHER
BOAMAH, JOHN A. BERARDI, RONALD
ROSSETTI, D. JORGENSEN, DENIS
COLEMAN, MARGUERITE ROSS, JOSEPH
STEFANO and NICOLE STEFANO,
Defendants.
________________________________________________________________
Argued December 13, 2016 – Decided June 9, 2017
Before Judges Reisner, Koblitz and Rothstadt.
On appeal from Superior Court of New Jersey,
Law Division, Burlington County, Docket No.
L-1909-07.
Thomas J. Trautner, Jr. argued the cause for
appellant (Chiesa Shahinian & Giantomasi, PC,
attorneys; Mr. Trautner, on the briefs).
Ronald S. Blumstein argued the cause for
respondent American Dream at Marlboro, LLC.
PER CURIAM
In this action concerning the viability of a deed restriction,
the Supreme Court affirmed and modified our earlier decision to
reverse and remand the Law Division's initial determination that
plaintiff, American Dream at Marlboro, L.L.C., failed to
demonstrate it should be relieved of the deed restriction and
granting defendant/intervenor Patricia Cleary summary judgment,
dismissing the complaint. See Am. Dream at Marlboro, L.L.C. v.
Planning Bd. of the Twp. of Marlboro, No. A-0738-09 (App. Div.
Jan. 20, 2011), aff'd as modified, 209 N.J. 161 (2012). In its
instructions to the Law Division, the Court directed that on remand
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when deciding whether plaintiff should be relieved of the
restriction, the trial court should consider (a) whether there
were any additional reasons for the original imposition of the
deed restriction and (b) defendant's argument that plaintiff acted
with unclean hands. Am. Dream at Marlboro, supra, 209 N.J. at
170-71.
Defendant1 now appeals from the Law Division's orders entered
on remand, denying her motions for summary judgment and to strike
plaintiff's expert's report and testimony, and granting final
judgment in favor of plaintiff. On appeal, defendant contends
that the trial court's findings were not supported by the evidence,
the court applied the wrong standard for determining whether a
deed restriction should be vacated, and it improperly failed to
strike plaintiff's expert's report and preclude his testimony
because they related only to a legal issue and otherwise stated a
net opinion. In addition, she argues that plaintiff failed to
meet its burden of proof. She also contends that the court
improperly applied the doctrine of unclean hands by giving
"improper credibility and evidentiary inferences to" plaintiff and
wrongfully shifting the burden of proof. Finally, defendant argues
the court should have granted her motion for summary judgment
1
None of the other defendants are participating in this appeal.
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because plaintiff "should have been estopped from [asserting]
there were material issues of fact in dispute," and the court
"should have disregarded the planning board's change in position."
We have considered defendant's contentions in light of our
review of the record and the applicable legal participles. We
affirm.
The history of the subject development, the application for
approvals, and the deed restriction are set forth in detail in
both our prior opinion, Am. Dream at Marlboro, supra, slip op. at
2-10, and the Court's opinion, Am. Dream at Marlboro, supra, 209
N.J. at 163-67. They need not be repeated at length for our
purposes and can be summarized as follows. Plaintiff acquired the
two subject residential projects (Beacon I and II) with knowledge
that it was obligated to include in the deed to one of Beacon I's
lots – a flag lot2 – a restriction against future subdivision that
was required by the Township of Marlboro's planning board when it
approved the project and modification to the original plans.
Plaintiff never filed the deed restriction. Defendant purchased
2
As we explained in our earlier opinion, the lot was proposed
to have "only a fifty-foot frontage on Haven Way[, and a]bsent [a]
long driveway [it] would be a landlocked parcel. Such a
configuration is referred to as a 'flag lot[.]'" Am. Dream at
Marlboro, supra, slip op. at 3. The Court adopted the same
definition. See Am. Dream at Marlboro, supra, 209 N.J. at 164.
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a lot in Beacon I that cornered the original flag lot and its
driveway. Plaintiff sought approval for a new plan that eliminated
the flag lot by converting its driveway into a roadway leading to
Beacon II property to which defendant objected, relying upon
plaintiff's failure to record the deed restriction. Based on that
objection, the planning board refused to consider plaintiff's
application. Plaintiff filed an action in lieu of prerogative
writs, seeking, among other relief, to vacate the deed restriction.
That action initially resulted in the trial court denying relief
to plaintiff. In addition, the court declared that the resolution
granting approval for Beacon II was void because the planning
board lacked jurisdiction to consider the applications in light
of the deed restriction.
After the appeal from the trial court's determination, and
upon the action's remand to the Law Division, defendant moved for
summary judgment, arguing the court should affirm its prior
decision. The court denied the motion setting forth its reasons
in a written decision on April 30, 2013. The court stated in its
decision that issues of fact remained in dispute that precluded
summary judgment – specifically, the purpose of the deed
restriction, whether there was continued justification for the
deed restriction, and whether plaintiff acted with unclean hands.
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During discovery, plaintiff produced an expert report by
licensed professional planner Louis C. Joyce. The report stated
that, based on his review of the board's resolutions, "[t]he
concern raised by the Planning Board about the newly created flag
lot centered around the possibility for the future subdivision of
the lot as could be permitted under" the township's ordinances.
He explained that he did "not find any direct reference or
inference in the review letters or approval resolutions that there
was any other concern or requirement caused by the approval of
[the flag lot] other than . . . the ability and potential of the
lot to be further subdivided." Thus, he concluded that the
planning board imposed the deed restriction to address its concern
about future subdivision of the flag lot, and that the ensuing
resolution "reaffirmed [the deed restriction] for the same
reasons." It was his opinion that the changed circumstances
presented by the modified plan to add the new parcel and extend
Haven Way as an access road eliminated not only the flag lot but
also "[t]he reasons for the 'voluntary restrictions on future
subdivision' stated in the 1995 approving resolution."
Defendant moved to strike the expert's report and preclude
his testimony, arguing the expert improperly opined as to matters
of law, offered impermissible net opinions, and was unreliable due
to his failure to reference the underlying methodology. In
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response to the motion, the court scheduled a N.J.R.E. 104(a)
hearing.
At the hearing, Joyce testified to his experience, background
and training, and about the materials he relied upon to form his
opinion regarding the purposes served by the deed restriction. He
stated that the planning board's concern here about the subdivision
of flag lots related to "density, . . . lots being created behind
other lots where you're going to have a rear yard facing someone's
front yard . . . without proper frontage[, and] . . . shared access
and multiple driveways that really aren't public streets." In
addition, the planning board was worried about the township's
inability to "mitigate or address" any disputes that may arise
between those sharing the road "as to who's going to maintain
it[,] . . . plow it[, or] . . . fix it." Joyce explained the flag
lot ordinance also addressed concerns about drainage, and the
"requirement that a lot front on an improved or approved street"
by requiring construction of a township road whenever a flag lot
is divided into more than two lots. He stated that he "found
nothing in the discussion or in the records [he] reviewed [that
indicated] the Township required [the deed restriction] as a
condition of approval," only that "it was accepted as an offer by
the applicant . . . and that seemed to end the discussion."
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Despite defendant's objections, the court concluded that
Joyce's testimony was admissible, rejecting defendant's contention
that it was a net opinion and finding that the expert explained
the basis for his opinion, including his reliance on planning
standards. According to the court, defendant's objections raised
issues that should be visited on cross-examination of the expert
at trial, but they did not establish a basis to bar his testimony.
After concluding the hearing, the trial court began the remand
hearing. Plaintiff presented testimony from its expert Joyce, its
president Michael Kaplan, and Gerald Sonnenblick, the attorney who
appeared on its behalf at the planning board hearing seeking
approval for the new lot's development. Defendant did not call
any witnesses.
Joyce testified3 that the sole purpose for the deed
restriction was to prevent future subdivision of the lot. This
opinion was based upon his review of the minutes of the May 17,
1995 planning board meeting and a November 23, 1994 letter from
Beacon Road's engineers to the planning board, and the absence of
any other reason for the deed restriction discussed in those
documents. Sonnenblick testified that, based upon his discussions
with Kaplan and plaintiff's engineer for the Beacon Woods projects,
3
Testimony from the N.J.R.E. 104 hearing was adopted as trial
testimony.
8 A-0547-15T2
he understood that the deed restriction was imposed because the
planning board "did not want . . . the [flag] lot to be subdivided
into two lots with a single driveway." He also testified that,
while he was aware of the deed restriction at the time of the
Beacon Woods II application, he was not "aware of any law that
indicated the Planning Board did not have jurisdiction or authority
to reconsider" the deed restriction. Kaplan testified that,
although he was aware of the deed restriction at the time plaintiff
closed title on Beacon Woods I, he understood from both his current
attorney and Sonnenblick that plaintiff could "get relief from the
deed restriction by virtue of eliminating the [f]lag [l]ot" with
the development of Beacon Woods II. He further testified that
plaintiff never filed a deed restriction for the flag lot because
it never conveyed the lot to another party and a deed restriction
would only be recorded upon transfer.
On June 30, 2015, the trial court issued a fifty-two page
written decision explaining its reasons for terminating the deed
restriction and rejecting defendant's contentions about the
application of the unclean hands doctrine. After recounting the
factual and procedural history of the matter, the court detailed
the parties' arguments. It also made credibility findings as to
each of the witnesses.
9 A-0547-15T2
The court turned to plaintiff's substantive claim and recited
the standard for determining whether to eliminate a deed
restriction. It found that, despite the absence of any minutes
from the 1995 and 1997 planning board meetings at which the deed
restriction was imposed, plaintiff had satisfied its burden of
proving "by a preponderance of [the] evidence that the original
purpose behind the imposition of the deed restriction by the
[Planning] Board was to prevent the creation of additional flag
lots." The court explained that "[t]he imposition of the deed
restriction condition . . . was in direct relation to what was
permissible under" the township's ordinance, which it stated
requires that a flag lot cannot be divided into more than two lots
without improvement of the access road. It found "that a plain
reading of the language in the 1995 Resolution indicates that the
[Planning] Board found the present configuration with one flag lot
acceptable, however, the possibility of two flag lots was not,"
and "that with the applicant's voluntary restriction on future
subdivision of the flag lot, [it] constituted sound planning."
This language, together with "Joyce's testimony as an expert
planner about why multiple flag lots are disfavored by planning
boards due to issues between neighbors over the maintenance of a
shared private access," formed the basis for the court's finding
10 A-0547-15T2
"that the purpose for the deed restriction in 1995 was to prevent
the creation of two flag lots."
Turning to the 1997 Resolution, the court addressed
defendant's arguments that its "references to aesthetics, adequate
light, air and open space [] support her position that the deed
restriction was integral to the approval of Beacon Woods II" and
"that the deed restriction allows for a shortened roadway known
as Haven Way." After rejecting the latter argument as being
without support in the record, finding that "none of the general
language in the 1997 Resolution applies to Haven Way," the court
addressed the relationship between the deed restriction and the
modifications underlying the 1997 Resolution. The court first
found that, because "the deed restriction predated the cluster
design, [it] could not have been an integral element of the cluster
design" and that "[t]he 1997 Resolution merely re-imposed the deed
restrictions 'based upon the variances previously granted.'" It
found that nothing in the record indicated any "additional reasons
for the re-imposition of the deed restriction in 1997" beyond the
deed restriction's "original purpose of preventing two flag lots."
The court found no evidence that the additional reasons for the
deed restriction argued for by defendant were "specific to the
imposition of the deed restriction."
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Having resolved the question of the original purpose of the
deed restriction, the court addressed whether plaintiff had
satisfied its burden to demonstrate "that it has become impossible
as a practical matter to accomplish th[at] purpose." The court
found plaintiff had shown "by a preponderance of the evidence that
the purpose of the deed restriction can no longer be accomplished
if the flag lot no longer exists," as would be the case under the
plans for Beacons Woods II. Thus, the court found plaintiff "ha[d]
met its burden of showing the requisite change in circumstances
such that [it was] entitled to relief from the deed restriction."
The court then turned to defendant's argument that plaintiff
was nevertheless barred from seeking equitable relief by its
unclean hands and that, because it was plaintiff who failed to
satisfy its obligation to record the deed restriction, plaintiff
"cannot now argue that it should become the beneficiary of the
lack of an adequate record." The court first rejected defendant's
argument that the court should apply "a clear and convincing
standard of proof" based on its failure to record the deed
restriction. According to defendant, that failure put her at a
gross disadvantage in disputing the purpose of the deed
restriction. The court found no evidence that the recording of
the deed restriction would have stated its purpose.
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The court concluded that plaintiff had "acted with unclean
hands" by certifying in its application that it fully complied
with its obligation for its plans to include "a copy of any
existing or proposed covenants or other deed restrictions applying
to the land [to be] subdivided." However, it also found that the
failure to disclose the restriction was rendered meaningless
because the court's earlier judgment in 2008 vacated the planning
board's approval of the Beacon Woods II application, and "[i]f
granted relief, [plaintiff] must still go before the Board seeking
approval for its planned development." The court rejected
defendant's position that plaintiff's misrepresentations in its
original application for approval of Beacon Woods II "operate[]
as a complete bar to equitable relief from the deed restriction
in perpetuity," noting that application of the doctrine of unclean
hands is discretionary and "may be relaxed in the interest of
fairness." It declined to apply the doctrine of unclean hands to
deny plaintiff the equitable relief it sought, relying upon
plaintiff's open advertisement of the entire Beacon Woods
development and belief that the planning board was aware of the
deed restriction when reviewing the Beacon Woods II application.
In addition, it cited to the fact that defendant did not rely upon
the deed restriction when purchasing her property in Beacon Woods
I. Under these circumstances, the court concluded that plaintiff
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was entitled to relief, despite "the fact that [plaintiff] created
the change in circumstances by acquiring additional undeveloped
land."
The court entered final judgment in favor of plaintiff on
August 24, 2015. On October 2, 2015, it entered an order
memorializing its earlier decision to deny defendant's motion to
bar Joyce's report and testimony. This appeal followed.
We begin our review by acknowledging that it is limited under
the "well-established . . . standards we apply in reviewing the
findings and conclusions of a trial court following a bench trial."
Allstate Ins. Co. v. Northfield Med. Ctr., P.C., ____ N.J.
____,____ (2017) (slip op. at 42). Under those standards,
we give deference to the trial court that
heard the witnesses, sifted the competing
evidence, and made reasoned conclusions. See
Rova Farms Resort v. Investors Ins. Co., 65
N.J. 474, 483-84 (1974). Reviewing appellate
courts should "not disturb the factual
findings and legal conclusions of the trial
judge" unless convinced that those findings
and conclusions were "so manifestly
unsupported by or inconsistent with the
competent, relevant and reasonably credible
evidence as to offend the interests of
justice." Id. at 484 (citation and internal
quotation marks omitted); see, e.g., Seidman
v. Clifton Sav. Bank, 205 N.J. 150, 169 (2011)
(same).
[Ibid. (quoting Griepenburg v. Twp. of Ocean,
220 N.J. 239, 254 (2015).]
However, "[q]uestions of law receive de novo review." Ibid.
14 A-0547-15T2
Applying those standards, we turn first to the Court's
direction to the trial court to assess on remand whether there
were reasons for the deed restriction other than to prevent the
subdivision of the flag lot and to defendant's contentions that
the trial court's determination of that issue was not correct.
Defendant contends the court ignored at least one additional
purpose of the deed restriction that remains viable — to "preserve
the approved lot layout of the Beacon Woods Subdivision," a
"smaller scale neighborhood type development with limited on-site
roadways." She also contends that the court misinterpreted the
language of the planning board's resolutions, the changed-
circumstances standard it had to apply, and the flag lot ordinance.
Defendant additionally argues that the court improperly shifted
the burden of proof by failing to require plaintiff to prove its
entitlement to the elimination of the deed restriction by clear
and convincing evidence because the deed restriction, if recorded,
would have favored defendant's position, likening plaintiff's
failure to record the deed to the spoliation of evidence. We
disagree.
We conclude from our review that the trial court properly
determined there was no evidence of concerns, other than the
possible subdivision of the flag lot, that the deed restriction
was meant to address. Thus, the continued imposition of the deed
15 A-0547-15T2
restriction after plaintiff modified its plans to eliminate that
lot was unwarranted. We affirm substantially for the reasons
expressed by the trial court in its comprehensive June 30, 2015
written decision. We add the following comments.
A party seeking to eliminate a deed restriction based on
changed circumstances must "demonstrate that it has become
'impossible as a practical matter to accomplish the purpose for
which'" the restriction was imposed. Am. Dream at Marlboro, supra,
209 N.J. at 169 (quoting Citizens Voices Ass'n v. Collings Lakes
Civic Ass'n, 396 N.J. Super. 432, 446 (App. Div. 2007)). "[T]he
test is stringent: relief is granted only if the purpose of the
servitude can no longer be accomplished." Ibid. (quoting Citizens
Voices, supra, 396 N.J. Super. at 446). It must be "clear that
the continuance of the servitude would serve no useful purpose and
would create unnecessary harm to the owner of the servient estate."
Ibid. (quoting Restatement (Third) Property: Servitudes § 7:10
comment a (2000)). We are satisfied, as was the trial court, that
plaintiff met that burden based upon the elimination of the flag
lot.
The planning board's resolutions never expressed any specific
reason for the deed restriction, other than referencing that there
was to be a restriction on any future subdivision of the flag lot
and, with that restriction, "the present configuration and
16 A-0547-15T2
voluntary restriction on future subdivision constitute[d] sound
planning." Although defendant argued that the language found in
portions of the resolutions could be interpreted to suggest other
concerns, neither she nor plaintiff adduced any evidence to support
that contention. The trial court was left with no other evidence
to support or contradict a finding that the deed restriction was
part of an effort to accomplish some other goal. Accordingly, at
best the purpose of the deed restriction was to prevent multiple
lots with shared driveways, and at worst the restriction's purpose
was ambiguous.
"An ambiguous restriction will not be enforced in equity so
as to impair the alienability or use of property." Cooper River
Plaza East, LLC v. Briad Grp., 359 N.J. Super. 518, 529 (App. Div.
2003). Because restrictions on the use of one's land are
disfavored, "[t]hey are always to be strictly construed." Freedman
v. Sufrin, 443 N.J. Super. 128, 131 (App. Div. 2015) (quoting
Bruno v. Hanna, 63 N.J. Super. 282, 285 (App. Div. 1960)). While
this rule "will not be applied to defeat the obvious purpose of a
restriction[,] . . . the meaning of a restrictive covenant will
not be extended by implication and all doubts and ambiguities must
be resolved in favor of the owner's unrestricted use of the land."
Ibid. (alterations in original) (quoting Bruno, supra, 63 N.J.
Super. at 287). Therefore, without evidence of another meaningful
17 A-0547-15T2
purpose the trial court properly determined that the restriction
should no longer be enforceable.
We similarly agree with the trial court's determination that
plaintiff's unclean hands did not bar the court from granting
plaintiff the equitable remedy of relief from a deed restriction.
We find no merit to defendant's arguments to the contrary.
The application of the doctrine of unclean hands is within
the court's discretion. Borough of Princeton v. Bd. of Chosen
Freeholders, 169 N.J. 135, 158 (2001). According to "[t]he
equitable maxim[,] '[a party] who comes into equity must be with
clean hands.'" Heuer v. Heuer, 152 N.J. 226, 238 (1998). It
provides that "a court should not grant relief to one who is a
wrongdoer with respect to the subject matter in suit." Borough
of Princeton, supra, 169 N.J. at 158. However, its application
is limited, see Heuer, supra, 152 N.J. at 238, as it does not
require a court to bar a litigant from seeking or obtaining relief
from the court because the doctrine "should not be used as
punishment[,] but to further the advancement of right and justice."
Pellitteri v. Pellitteri, 266 N.J. Super. 56, 65 (App. Div. 1993).
"It is the effect of the inequitable conduct on the total
transaction which is determinative whether the maxim shall or
shall not be applied." Heuer, supra, 152 N.J. at 238 (quoting
Untermann v. Untermann, 19 N.J. 507, 518 (1955).
18 A-0547-15T2
It does not repel all sinners from courts of
equity, nor does it apply to every
unconscientious act or inequitable conduct on
the part of the complainants. The inequity
which deprives a suitor of a right to justice
in a court of equity is not general iniquitous
conduct unconnected with the act of the
defendant which the complaining party states
as his ground or cause of action; but it must
be evil practice or wrong conduct in the
particular matter or transaction in respect
to which judicial protection or redress is
sought.
[Heuer, supra, 152 N.J. at 238 (quoting
Neubeck v. Neubeck, 94 N.J. Eq. 167, 170 (E.
& A. 1922)).]
"It is the effect of the inequitable conduct on the total
transaction which is determinative whether the maxim shall or
shall not be applied." Ibid. (quoting Untermann, supra, 19 N.J.
at 518).
We conclude from our review that the trial court correctly
determined that, although plaintiff acted with unclean hands by
failing to record the deed restriction, there was no evidence that
its failure had an impact on any transaction. Specifically, there
was no evidence that defendant was adversely effected. Certainly,
had plaintiff sought to subdivide the flag lot in contravention
of what should have been a deed restriction, defendant would have
a viable claim based upon unclean hands. However, the deed
restriction did not guarantee to defendant or anyone else that the
approved flag lot would forever be maintained, just that it could
19 A-0547-15T2
not be subdivided. Once plaintiff's plans were modified to remove
the flag lot, there was simply nothing that required restricting
further development from happening in the future. In other words,
the restriction on the flag lot's title did not prevent
construction of additional homes in either project. Also, as the
trial court observed, the fact that plaintiff was relieved of the
deed restriction does not mean that it is automatically entitled
to the approvals that it must still obtain from the planning board.
To the extent we have not specifically addressed any of
defendant's remaining arguments, we find them to be without
sufficient merit to warrant discussion in a written opinion. R.
2:11-3(e)(1)(E).
Affirmed.
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