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Britt v. Camden Redevelopment Agency

A-4052-06T1 and A 4345-06T1 (N.J. Super. App. Div. 2008) (Unpublished)

MUNICIPALITIES; AGREEMENTS; SETTLEMENTS — Municipal governing boards are required to consent to the settlement of litigation by formal action and a municipality’s attorney’s negotiation of a settlement cannot bind the governing body.

For the purpose of adding additional parking and a possible take-out restaurant, a business owner sought to purchase a vacant property that was adjacent to his store. He entered into a contract for the purchase of the property from the municipal redevelopment agency. It was later disclosed that the municipality, not the redevelopment agency, owned the property. The business owner continued to make preparations for the acquisition of the property by obtaining zoning permits and provisional variances. The business owner anticipated the transfer of title from the municipality to the redevelopment agency so that he could purchase the property under contract. The business owner also attempted to purchase the property directly from the municipality. The business owner never got a response from the municipality and the property was never transferred to the redevelopment agency.

Nearly one year later, the business owner sued the redevelopment agency, the municipality, and a number of municipal and agency officials. His claims included breach of contract on the grounds that the municipality failed to convey the property to the redevelopment agency and that the agency failed to abide by the contract. The business owner also claimed that two officials for the redevelopment agency also held positions with as municipal officials, and that they had discriminated against him on the basis of race by preventing the transfer of the property from the municipality to the agency. He sought enforcement of the contract and monetary damages.

During the proceedings, an attorney for the redevelopment agency offered the business owner a settlement in which the property was to be conveyed to him and he was to get a monetary settlement in exchange for dismissal of the action. The business owner accepted the settlement, but the municipality claimed that it never authorized a transfer of title to the property to the redevelopment agency. The lower court concluded that a previous ordinance authorized a transfer of the property from the municipality to the agency when a buyer for the property had been found and ordered the transfer of the property to the agency and the enforcement of the settlement between the agency and the business owner. The municipality’s motion for reconsideration was denied.

On appeal, the Appellate Division noted that municipal boards were required to consent to the settlement of litigation by formal action and that a municipal attorney’s negotiation of a settlement could not bind a governing body. The Court pointed out that the redevelopment agency approved of the settlement in a caucus but never formally voted on the settlement and that the business owner and his attorney were presumed to know that the caucus approval was not legally binding. On that basis, it found that since the settlement was never approved by the municipality’s governing board, that it was not enforceable. The Court also found that the attorneys for the municipality and the agency did not, and were not authorized to, finalize the settlement, pointing out that the ordinance which authorized the transfer of the property from the municipality to the agency was contingent upon the agency finding a buyer within one year, at which point title to the property automatically reverted to the municipality. The Court found that the agency never had the authority to negotiate a transfer of land to the business owner according to the ordinance and reversed the lower court’s order for the transfer of the land to the agency from the municipality and the enforcement of the settlement. The matter was remanded to the lower court and the business owner’s claims, including his monetary claims, were restored.


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