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

NOT FOR PUBLICATION WITHOUT THE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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