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Park Center at Route 35, Inc. v. The Zoning Board of Adjustment of the Township of Woodbridge

A-5351-07T2 (N.J. Super. App. Div. 2009) (Unpublished)

EASEMENTS —Where a cross easement agreement only requires one party to grant its adjoining property owner a non-exclusive easement for parking, and the easement agreement itself says nothing more, it is not a breach of the easement agreement if the adjacent property owner does not get access to particular parking spaces it had anticipated it would enjoy.

A developer was building a strip mall. Phase II of the project required demolition of an existing building so as to provide six additional parking spaces for businesses constructed in Phase I. The developer repeatedly attempted to delay its implementation of Phase II, including by making an application to the municipality to amend the site plan. This application was denied. While the project was underway, the owner of a medical office building on adjoining land agreed to sell one of its parcels to the developer. The contract provided for the parties to enter into a cross easement agreement to permit vehicular access, parking, and pedestrian traffic rights on each other’s property. This grant gave the adjoining owner access to all seventy-two parking spaces constructed by developer, as opposed to just the nine spaces that existed previously on the parcel the adjoining owner transferred. The easements were to be used in accordance with the site plan approval which showed the anticipated construction of six additional parking spaces on Phase II. Each party agreed to indemnify and hold harmless the other for any breach of the easement agreement. The adjoining owner sued the developer, claiming the developer breached its contract with him by seeking to avoid construction of Phase II, thereby denying him access to six parking spaces that he claimed were promised under the cross easement agreement. The claim to construct the parking spaces subsequently became moot when the spaces were constructed.

The lower court dismissed the damages action. It also found that the adjoining owner’s claim for legal fees was not recoverable. It did not reach a determination as to whether the developer had breached the cross easement agreement. The adjoining owner appealed.

The Appellate Division reversed and remanded the matter for a determination as to whether the developer’s attempt to unilaterally amend the site plan and to appeal the board’s denial constituted a breach of the cross easement agreement.

On remand, the lower court concluded that the developer’s actions did not constitute an actual or anticipatory breach of the easement agreement. It ruled that the developer had complied with the purchase agreement when it paid the purchase price and entered into a cross easement agreement with the building owner. It also held that neither the purchase contract nor the cross easement agreement guaranteed either party a specific number of parking spaces. Further, the lower court ruled that: (a) the adjoining owner knew there would be a Phase II; (b) the cross easement agreement did not set a date by which Phase II would be completed; (c) the adjoining owner knew that waiting for Phase II to be built would delay construction of the additional parking with no definite date given for the building’s demolition; and (d) the developer was free to amend the site plan. Therefore, the lower court held that if the timing and implementation of Phase II and the addition of six additional spaces were intended to be material terms of the cross easement agreement, they should have been addressed in the document. Finally, it noted that even without the six additional spaces, the owner of the medical office building had not been deprived of parking on either its property or on the developer’s property. The owner of the medical building appealed.

The Appellate Division affirmed. It agreed with the lower court that the developer’s actions did not amount to an anticipatory breach of any of the material elements of the cross easement agreement. It noted that, in its previous decision remanding the matter to the lower court, it specifically reserved the possibility that the developer could amend its site plan by returning to the municipality to show there was a sufficient change in circumstances warranting a departure from its earlier requirement that Phase II be completed. Here, the cross easement agreement required the developer to grant the adjoining owner a non-exclusive easement for parking. It noted that the adjacent owner got access to the parking. Thus, it concluded that the adjoining owner had received the benefit of all material terms of the agreement and there was no breach, anticipatory or otherwise.

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