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CPG Tinton Falls Urban Renewal, LLC v. The Township of Neptune

A-6399-05T1 (N.J. Super. App. Div. 2007) (Unpublished)

MUNICIPALITIES; AGREEMENTS — A municipality, as a party to an agreement, may not have the right to unilaterally amend the agreement, but absent a restriction in the agreement itself, it does have the right to assign its rights and obligations to another party to the agreement without the consent of the other parties to that agreement.

A borough and a township entered into a five-party property owners’ agreement which also included an urban renewal corporation, a developer, and a property owner who owned land in the township. The renewal corporation, as an assignee of the borough and the property owner, acquired a number of lots in both municipalities on which it planned to construct an outlet center. Since the outlet center was not to be built directly adjacent to the highway, a bridge and overpass were needed for access to the outlet center from the highway, which served as a dividing line between the municipalities. Under the agreement, the township was to accept dedication of the designated areas of the township for the planned bridge and overpass construction and to continue maintaining such areas. One year before construction was to begin, the municipality, by resolution, declared that the property owners’ agreement was null and void and sought to have state permits for the construction revoked. After the municipality failed to respond to accept the deeds of conveyance of the areas designated for construction, the renewal corporation brought an action to prohibit the municipality from interfering with the construction plan and for an order that would have directed the municipality to comply with the agreement. The lower court found granted the requested relief to the renewal corporation in the form of a summary judgment.

On appeal the Court rejected the municipality’s argument that the lower court wrongly converted the matter to one for summary judgment and that the municipality never consented to the change in the proceeding. The Court pointed to statements made by the lower court and the attorney for the municipality which both indicated that the municipality was aware of, and consented to, the lower court’s decision to convert the matter. The Court added that lower courts have the discretion to convert a request for a restraining order into a summary judgment proceeding and that the lower court, in this case, did not abuse its discretion in choosing to do so. The Court pointed out that interpretation of a contract is usually a legal determination as opposed to a factual determination. Additionally the Court pointed out that when the language of a contract is clear and unambiguous, the terms must be enforced as written and also that it is not the place of a court to re-write the terms of a contract to either party’s benefit or detriment. It also rejected the municipality’s argument that the borough did not have the contractual authority to assign its rights and obligations to the renewal corporation without the consent of the other parties to the agreement, noting that such assignments were allowable unless contractually prohibited. The Court differentiated between the right to amend the agreement, which would have required the consent of all parties, and the right to assign rights and obligations, which did not require such consent according to the wording of the agreement. The municipality’s remaining arguments were dismissed without discussion and all of the lower court’s findings were affirmed.

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