AMERICAN DREAM AT MARLBORO, LLC VS. PLANNING BOARD OF THE TOWNSHIP OF MARLBORO(L-1909-07, BURLINGTON 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NOT FOR PUBLICATION WITHOUT THE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-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

2 A-0547-15T2
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.

3 A-0547-15T2
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.

4 A-0547-15T2
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.

5 A-0547-15T2
 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

6 A-0547-15T2
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."

7 A-0547-15T2
 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."

11 A-0547-15T2
 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.

12 A-0547-15T2
 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

13 A-0547-15T2
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.

20 A-0547-15T2