CENTENNIAL PLAZA PROP, LLC v. TRANE U.S. INC.

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

CENTENNIAL PLAZA PROP, LLC and

IMARC PROPERTIES, LLC,

No. 22-cv-01262 (MEF)(MAH)

OPINION and ORDER

Plaintiffs,

v.

TRANE U.S. INC., et al.,

Defendants.

Table of Contents

I. Background

A. The Allegations

B. The Lawsuit

C. The Motion

II. The Court’s Approach

III. Disparity

A. Background

1. The 1985 Master Deed

2. The 2001 and 2002 Amendments

3. Legal Principles

B. Analysis

IV. The Plaintiff’s Claims

A. Breach of Contract

B. Breach of the Implied Covenant

C. Specific Performance & Declaratory Judgment

V. Conclusion

* * *

A business sold two pieces of real property.

It was then sued, on the theory that the sale violated certain

other companies’ right of first refusal.

The seller now moves to dismiss, arguing there was no such

right.

The motion is granted as to those parts of it that are taken up

here by the Court.

* * *

I. Background

A. The Allegations

The relevant allegations for now are as follows.

Two limited liability companies1 jointly owned two of the four

units in a condominium. See Complaint2 ¶¶ 5, 8.

A corporation3 owned the two neighboring units. See id. ¶¶ 1-2.

A document imposed certain restrictions on owners of units in

the condominium. See id. ¶ 14. It was called the Master Deed

and Declaration for the Creation and Establishment of a

Condominium, see id., and is referred to from here as “the

Master Deed.”

The corporation sold the units it owned.4 See id. ¶¶ 28-29.

1 Centennial Plaza Prop, LLC and IMARC Properties, LLC.

2 This refers to the Amended Complaint filed in 2024.

3 Trane U.S. Inc.

4 The Complaint alleges that the corporation agreed to sell the

units to “Three Cubed[, LLC], and/or F. Greek [Development,

Inc.]” Complaint ¶ 28. The purchase rights were later

allegedly assigned to Centennial Greek, another limited

liability company. See id. ¶ 29.

The two limited liability companies came to believe this was

illegal.

The reason: the Master Deed was said to give incumbent

condominium owners such as themselves a right of first refusal,

see id. ¶¶ 20, 24, a right to buy the units before anyone else

had the chance. But the corporation did not approach the

limited liability companies before selling off its units. See

id. ¶ 20. Rather, it posted them for sale on a public real-

estate website. See id. ¶¶ 21-23.

B. The Lawsuit

In light of the above, the limited liability companies (“the

Plaintiffs”) sued the corporation (“the Defendant”).5

Of the Plaintiffs’ claims against the Defendant, four are taken

up here.6

The gist of each: by selling its two units through a public

website, the Defendant violated the Master Deed’s right-of-

first-refusal provision --- and in doing so broke New Jersey7

law. See id. ¶¶ 30-50.

5 The Plaintiffs also sued the three entities listed in footnote

4. They too have moved to dismiss. Their motion is considered

in a separate order that will issue later today.

6 These are claims for specific performance (Count I);

declaratory judgment (Count II); breach of contract (Count III);

and breach of the implied covenant of good faith and fair

dealing (Count IV). See id. ¶¶ 30-50. (There are other claims

in the case, too --- for fraudulent inducement (Count V) and

tortious interference with prospective contractual relations

(Count VI). See id. ¶¶ 51-59. These claims are the subject of

the order referenced in footnote 5.)

7 All of the Plaintiffs’ claims are common-law claims. The

parties’ briefs assume they arise under New Jersey law, see

Motion to Dismiss at 19; Opposition Brief at 10-11, and so that

is how the Court takes them. See Marino v. Brighton Gardens of

Mountainside, 697 F. Supp. 3d 224, 229 (D.N.J. 2023) (“[W]here

parties’ briefs assume that a particular forum’s law controls,

such implied consent is sufficient to establish choice of law.”)

(cleaned up).

C. The Motion

The Defendant moves to dismiss the Complaint under Federal Rule

of Civil Procedure 12(b)(6).

The motion is before the Court.

II. The Court’s Approach

Before analyzing the motion in earnest, look to the two legal

principles that set the stage here.

The first: in assessing a motion to dismiss, a court generally

must focus only on the allegations laid out in the complaint.

See Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir.

2009).

But there are exceptions to this rule, and one applies here.

Namely, a court may also consider anything that a plaintiff

chooses to attach to its complaint. See Sprauve v. W. Indian

Co. Ltd., 799 F.3d 226, 232 n.6 (3d Cir. 2015); Pryor v. Nat’l

Coll. Athletic Assoc., 288 F.3d 548, 559-60 (3d Cir. 2002);

Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d

1192, 1196 (3d Cir. 1993).

Here, the Master Deed and its relevant amendments were attached

by the Plaintiffs to their initial complaint. See Motion to

Dismiss, Attachment 3, at 46-79; id., Attachment 4, at 1-62.

The Court can therefore look to them here.8

8 The Master Deed and its amendments were attached to the

initial complaint, which was filed in state court. See Notice

of Removal, Exhibit A. The case was then removed here. The

Plaintiffs’ amended complaint is now the operative complaint.

(It is generally called “the Complaint” in this Opinion and

Order. See footnote 2.) The amended complaint does not have

any attachments. But no one suggests this puts consideration of

the Master Deed and its amendments out of bounds for the Court.

Indeed, those documents are quoted throughout the parties’

briefs. See Motion to Dismiss at 5-8, 13; Opposition Brief at

4. Given all this, the parties have waived any possible

argument that the Master Deed and its amendments cannot be

considered here because they were appended to the first

complaint but not the current one. See, e.g., United States v.

Dupree, 617 F.3d 724, 727-28 (3d Cir. 2010); see also Brown v.

Certain Underwriters at Lloyds, London, 777 F. App’x 34, 36 (3d

A second legal principle: in assessing a motion to dismiss, a

court must generally take the plaintiff’s allegations as true.

See, e.g., Phillips v. Cnty. of Allegheny, 515 F.3d 224, 228 (3d

Cir. 2008).

But there is again a relevant exception.

“Where there is a disparity between a written instrument annexed

to a pleading and an allegation in the pleading based thereon,

the written instrument will control.” ALA, Inc. v. CCAIR, Inc.,

29 F.3d 855, 859 n.8 (3d Cir. 1994); accord Lungu v. Antares

Pharma Inc., 2022 WL 212309, at *5 n.14 (3d Cir. Jan. 25, 2022);

In re NewStarcom Holdings Inc., 816 F. App’x 675, 678 n.7 (3d

Cir. 2020); Boldrini v. Wilson, 542 F. App’x 152, 155 (3d Cir.

2013); 5A C. Wright & A. Miller, Fed. Prac. & Proc. Juris.

¶ 1327 (4th ed. 2024); Joyce v. Jaguar Land Rover N. Am. LLC,

2025 WL 675888, at *19 n.32 (Mar. 3, 2025).

The key question in this case is whether there is such a

“disparity” --- between (a) the Master Deed and its amendments

(which, as noted, the Court can consider) and (b) the

Plaintiffs’ main allegation.

The Plaintiffs’ main allegation is this: there was a right to

first refusal here. See Complaint ¶¶ 13-19.

This allegation is not based, for example, on any asserted

verbal promises. See id.9

Cir. 2019). And in any event, it bears noting that an argument

along those lines would have had an uphill climb. See Mayer v.

Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (in deciding a

12(b)(6) motion, courts may look to undisputedly authentic

documents that are integral to a plaintiff’s claims); Buck v.

Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006)

(similar, as to items appearing in the record of the case).

9 The Plaintiffs at one point suggest that, in a 2021 letter,

the Defendant “recognized” the need to comply with the 1985

Master Deed. See Opposition Brief at 12. But the Plaintiffs do

not develop any argument from this or cite any cases. They do

not, for example, develop a course-of-conduct or estoppel

argument. “[C]ourts generally should not address legal issues

that the parties have not developed through proper briefing.”

Sw. Pa. Growth All. v. Browner, 121 F.3d 106, 122 (3d Cir.

2022). And the Court declines to do so here. See also Reynolds

v. Wagner, 128 F.3d 166, 178 (3d Cir. 1997) (“[A]n argument

Rather, it rests on the Master Deed and the right of first

refusal that was written into it --- and on the argument that

later amendments to the Master Deed did not cut the right of

first refusal out of the Deed. See Complaint ¶ 19 (“Neither of

the amendments to the Master Deed altered or eliminated the

Right of First Refusal.”).

In short, the Plaintiffs’ main allegation (that there was a

right of refusal) is entirely based on “written instrument[s]”

(the Master Deed and its amendments) that were “annexed to a

pleading” (the original complaint, see footnote 8). ALA, Inc.,

29 F.3d at 859 n.8.

Therefore, the Plaintiffs’ right-of-first-refusal allegation

must be compared to the Master Deed and its attachments. See

id.

If the two are consistent, the allegation counts, and it is

taken as true on this motion to dismiss. See id.

If there is a meaningful enough “disparity” between them, the

allegation is trumped --- it is put aside, and not considered.

See id.

* * *

In Part III, the Court takes up these issues.10

The Court’s conclusion: there is a “disparity,” because the

Master Deed, as amended, does not include a right of first

consisting of no more than a conclusory assertion . . . will be

deemed waived.”).

10 The Plaintiffs at one point suggest that such an analysis is

not necessary, arguing that the motion to dismiss must be denied

because a prior decision here is now the law of the case. But

that doctrine is discretionary, see In re Celgene Corp., Inc.

Sec. Litig., 747 F. Supp. 3d 748, 761 (D.N.J. 2024), and the

Court will not apply it here. The referenced decision granted

the Plaintiffs’ motion to amend the initial complaint, to add

one of the defendants listed at footnote 4 to Count VI. The

United States Magistrate Judge determined that the amendment

would not be futile. But today’s decision does not involve that

defendant or that count. And even if it did, the Magistrate

Judge’s decision noted that it did not consider the documents

attached to the original complaint; as set out above, this

decision does.

refusal. Accordingly, the Deed “control[s],” id., the

Plaintiffs’ allegation to the contrary drops away --- and there

is therefore no right of refusal in play in this case.

In Part IV, the Court considers the implications of this for the

Defendant’s motion to dismiss.

The Court’s holding: the motion must be granted. Among other

things, the Plaintiffs cannot successfully claim breach of a

contract (the Master Deed) by citing failure to comply with an

obligation (to afford a right of first refusal) that is not

actually a part of the contract.

III. Disparity

To determine whether there is a “disparity” here, see Part II,

the stepping-off point is some background, as to: the key

language from the original Master Deed, see Part III.A.1, and

its relevant amendments, see Part III.A.2, plus the legal

principles that control interpretation of these documents. See

Part III.A.3. From there, consider whether there is a

disparity. See Part III.B.

A. Background

1. The 1985 Master Deed

The original Master Deed dates to 1985. See Motion to Dismiss,

Attachment 3, at 47. In relevant part, Article 17 of the Master

Deed said this:

17(d) No Owner shall sell, convey or

otherwise transfer its Unit without the

prior written consent of the Board of

Managers unless: . . .

17(d)(2) Before executing any such sale,

conveyance or transfer, the Owner who

proposes to do so (the “Offeror”) gives

written notice of all of the material terms

of the proposed sale, conveyance or transfer

to each of the other Unit Owners and allows

them a period of 30 days within which to

tender a binding written commitment to

purchase the Offeror’s Unit for the same or

a higher price and on the same other

terms . . . .

Motion to Dismiss, Attachment 3, at 74, art. 17(d).

This part of the Master Deed, Article 17(d), requires an Owner

to choose --- between (a) asking the Board for permission before

selling or (b) giving other Unit Owners a type of right of first

refusal before selling.11

2. The 2001 and 2002 Amendments

In 2001, the Master Deed was amended. See id. ¶ 18.

Article 17 of the 2001 amendment started this way:

Amendment to Declaration12 Article 17.

Article 17 of the Original Declaration is

hereby amended and restated in its entirety,

as follows:

Motion to Dismiss, Attachment 4, at 48.

The 2001 amendment also made a change to the body of

Article 17(d):

17(d) In each instance where an Owner shall

be required to obtain a consent of the Board

of Managers, such consent shall not be

unreasonably withheld, delayed, and/or

conditioned.

Id. at 49, art. 17(d).

11 This the relevant provision of the Master Deed because,

apparently without first getting Board approval, the Defendant

(an Owner, see Motion to Dismiss, Attachment 3, at 37 ¶ 7)

allegedly sold two Units (see Complaint ¶¶ 20-24) without first

providing the Plaintiffs (Unit Owners, see id. ¶ 8) a 30-day

chance to snap them up.

12 In the various amendments, the Master Deed is called the

“Declaration.” Recall that the full name of the Master Deed is

Master Deed and Declaration for the Creation and Establishment

of a Condominium.

The 2001 amendment to Article 17 included various “instance[s]”

in which an Owner would “be required to obtain a consent of the

Board.”13

But the 2001 amendment said nothing about the “instance” at

issue here. In its Article 17, the original 1985 Master Deed

had said that Board consent was needed to sell if no 30-day

right of first refusal had been provided to other unit owners.

See Motion to Dismiss, Attachment 3, at 74, art. 17(d). But in

the 2001 amendment to Article 17, that was gone; there were no

references to such a right.

* * *

The Master Deed was again amended in 2002. See Complaint ¶ 18.

The 2002 amendment opened as the 2001 amendment had.

Amendment to Declaration Article 17.

Article 17 of the Original Declaration is

hereby amended and restated in its entirety,

as follows:

Motion to Dismiss, Attachment 4, at 55.

It continued:

17(d) In each instance where an Owner shall

be required to obtain a consent of the Board

of Managers, such consent shall not be

unreasonably withheld, delayed, and/or

conditioned and shall be deemed given if no

response is given within 30 days after the

date of a request for consent.

Id. at 56, art. 17(d).

And from there, same as before. As with the 2001 amendment, the

2002 amendment listed out a number of “instance[s]” that

required Board consent. See id. at 55, art. 17(b)(i) (same as

the 2001 amendment); id. at 56, art. 17(b)(ii) (same); id. art.

13 See Motion to Dismiss, Attachment 4, at 49, art. 17(b)(i)

(requiring that certain building changes receive the Board’s

consent); id., art. 17(b)(ii) (lessees may further sublet their

premises only with the prior consent of the Board); id., art.

17(c) (an Owner can typically mortgage its property only with

the Board’s consent).

17(c) (same). But as with the 2001 amendment, the key relevant

“instance” was not there in the 2002 amendment; the right to

refusal that had been in the 1985 Master Deed was not included.

3. Legal Principles

The parties here assume that the Master Deed should be

interpreted under New Jersey contract law. See Motion to

Dismiss at 13-17, 19; Opposition Brief at 10-11. For the

purposes of this motion, the Court follows their lead. See,

e.g., Hernandez v. Twp. of Lyndhurst, 2025 WL 456950, at *8

(D.N.J. Feb. 10, 2025).14

“Under New Jersey law the construction of a written document is

ordinarily a matter of law for the court unless the meaning is

uncertain or ambiguous.” Suburban Transfer Serv., Inc. v. Beech

Holdings, Inc., 716 F.2d 220, 224 n.6 (3d Cir. 1983).

How to tell whether an ambiguity exists? “[I]f the terms of the

contract are susceptible to at least two reasonable alternative

interpretations.” M.J. Paquet, Inc. v. N.J. Dep’t of Transp.,

171 N.J. 378, 396 (2002).

And, in determining the meaning of provisions in a contract,

“contract terms should be given their plain and ordinary

14 And note that the parties’ approach seems to make sense. The

Plaintiffs’ claims arise under New Jersey law. See footnote 7.

When a claim arises under New Jersey law and requires

interpretation of a contract, the contract must generally be

interpreted under New Jersey law. See Tauriello v. Twp. of

Edison, 288 F. App’x 825, 828 (3d Cir. 2008). The Master Deed

is a kind of restrictive covenant --- in various ways, it limits

an owner’s ability to sell its property. See generally

Restrictive Covenant, Black’s Law Dictionary (12th ed. 2024) (“a

negative covenant that limits the permissible uses of the land”;

“[a] private agreement, usu. in a deed or lease, that restricts

the use or occupancy of real property”). And courts applying

New Jersey law have held that “[a] restrictive covenant is a

contract and subject to general rules of contract construction.”

Millea v. Devireddy, 2023 WL 3856342, at *3 (N.J. Super. Ct.

App. Div. June 6, 2023); see also, e.g., Cooper River Plaza

East, LLC v. Briad Grp., 359 N.J. Super. 518, 527 (App. Div.

2003).

meaning.” Kernahan v. Home Warranty Adm’r of Fla., Inc., 236

N.J. 301, 321 (2019).

To assist with this, New Jersey courts often look to general-use

dictionaries. See, e.g., Norman Int’l, Inc. v. Admiral Ins.

Co., 251 N.J. 538, 552-53 (2022); Highland Lakes Country Club &

Cmty. Ass’n v. Franzino, 186 N.J. 99, 117-18 (2006); Est. of

Misiewicz v. Suncor Assocs., 2006 WL 1479499, at *4 (N.J. Super.

Ct. App. Div. May 31, 2006).

And to legal dictionaries, too. See, e.g., Boyle v. Huff, 257

N.J. 468, 480 (2024); Digital Grp., Inc. v. Sagitec Sols., LLC,

2017 WL 3568095, at *7 (N.J. Super. Ct. App. Div. Aug. 18,

2017); Est. of Keppel v. Angela’s Angels Home Healthcare, 2019

WL 2060285, at *3 (N.J. Super. Ct. App. Div. May 9, 2019); Fitts

v. Chase Manhattan Mortg. Corp., 2006 WL 3432296, at *4 (N.J.

Super. Ct. App. Div. Nov. 30, 2006).

B. Analysis

With this background in mind, come now to the basic questions.

Is the 1985 Master Deed still legally operative to the extent it

contained a right of first refusal? Has that right survived the

2001 and 2002 amendments to the Master Deed, which say nothing

about a right of first refusal?

The Plaintiffs say: yes and yes. See Opposition Brief at 5.

The Defendant goes the other way on each question. See Motion

to Dismiss at 6-7.

The Court’s conclusion: the Defendant has it right.

To see why, begin by noting that the law includes any number of

background default rules as to how to harmonize one legal text

with another. See, e.g., Kochetkova v. Garnet Health Med. Ctr.,

697 F. Supp. 3d 276, 280 n.6 (D.N.J. 2023) (describing some of

these in the context of multiple statutes); Vergopia v. Shaker,

191 N.J. 217, 227 n.6 (2007) (describing some of these in the

context of a corporation’s organic documents); In re Sapery’s

Est., 28 N.J. 599, 610 (1959) (describing some of these in the

context of wills and codicils).

But sometimes, there is no need to fall back on whatever the

default rule might otherwise be --- because the vacuum has been

filled, and a clear choice has been made by the drafter of one

legal text as to how it should be fitted together with another.

See Kochetkova, 697 F. Supp. 3d at 280 (providing an example).

That is the case here.

The 2001 and 2002 amendments to Article 17 state explicitly how

they are to be taken in relation to Article 17 of the 1985

Master Deed. Each amendment says:

Article 17 of the Original Declaration is

hereby amended and restated in its entirety,

as follows:

Motion to Dismiss, Attachment 4, at 48, 55.

To read this phrase is to know, clearly, that the 2001 and 2002

Article 17 amendments to the Master Deed wholly displace Article

17 of the 1985 Master Deed, making it legally inoperative.

The words make this plain.15

Per the relevant dictionaries, to amend something means to

change it.16 So the 2001 and 2002 amendments to Article 17

change Article 17 of the 1985 Master Deed.

A changed version of a text is a new version of it. How do old

and new texts live together? There are any number of

possibilities.

But here, the amendments provide the answer: the new pushes

aside the old wholly and completely, “in its entirety.” The new

Article 17 “restate[ment]” is not just a summary of the old

15 Plain meaning may not be the only way to think through these

issues. New Jersey law generally requires that contractual

terms of art be given the meaning associated with them in the

context from which they sprang up. See, e.g., 18W Holdings,

Inc. v. Sing for Serv., LLC, 2025 WL 306561, at *5 (D.N.J. Jan.

27, 2025). “[A]mended and restated in its entirety” may well be

a term of art. But no one argues the point, so the Court does

not take it up.

16 See Amend, v., sense 2, Black’s Law Dictionary (12th ed.

2024) (“To change the wording of; specif., to formally alter”);

Amend, v., sense 2b, Merriam-Webster, https://www.merriam-

webster.com/dictionary/amend (last visited Mar. 13, 2025) (“to

alter especially in phraseology”); Amend, v., sense I.1.a,

Oxford English Dictionary,

https://www.oed.com/dictionary/amend_v?tab=meaning_and_use#55131

53 (last visited Mar. 13, 2025) (“to make changes to (a text);

to modify, revise.”).

Article 1717 --- rather, it is now (“hereby”) the whole statement

of it, the “entirety” of it.

Consistent with this reading, courts routinely hold that “the

language used in [a later agreement] --- that it ‘amends and

restates [the earlier agreement] in its entirety’ --- is an

objective manifestation of the parties’ intention to supersede

and replace the [the earlier agreement].” Berkshire Bank v.

Pioneer Bank, 2021 WL 2763120, at *19 (N.Y. Sup. Ct. July 1,

2021) (cleaned up); see also, e.g., BNP Paribas Mortg. Corp. v.

Bank of Am., N.A., 778 F. Supp. 2d 375, 401-02 (S.D.N.Y. 2011);

L-3 Commc’ns Corp. v. OSI Sys., Inc., 2004 WL 42276, at *9

(S.D.N.Y. Jan. 8, 2004); In re Est. of Kneznek, 727 N.Y.S.2d

180, 182 (N.Y. App. Div. 2001).18

And drafters of model contractual amendments often suggest using

“amended and restated in its entirety” as a way to signal that

the old version of a provision is being completely swapped out

for the new one. See, e.g., Amendment to LLC Agreement (DE),

17 A “restate[ment]” can sometimes be just a summary. This can

be true in ordinary language. See Restate, v., sense 2, Oxford

English Dictionary,

https://www.oed.com/dictionary/restate_v2?tab=meaning_and_use

(last visited Mar. 13, 2025) (“[t]o state or express again or in

a different way, now esp. more clearly”). And it can be true in

the law. Think, for example, of American Law Institute

“restatements” of the law. These are often (though not always)

understood as efforts to summarize the law as it is, cf. Church

v. Collection Bureau of Hudson Valley, Inc., 704 F. Supp. 3d

521, 537 (D.N.J. 2023), not to displace it. This contrasts with

other approaches to legal restatement --- that are also based on

an accumulation of older judicial materials, but aim to

supersede them completely. See J.H.A. Lokin, The First

Constitution of the Codex Justinianus, 9 Subseciva Groningana

343, 357 (2014) (discussing one such example).

18 Courts routinely assume this point, too. See, e.g., Parrett

v. Am. Ship Bldg. Co., 990 F.2d 854, 857 (6th Cir. 1993);

Pearson v. Univ. of Chi., 2018 WL 3214219, at *2 (N.D. Okla.

June 29, 2018); In re TOUSA, Inc., 2011 WL 1627129, at *1 (S.D.

Fla. Mar. 4, 2011); Co-Investor, AG v. Fonjax, Inc., 2009 WL

2390227, at *8 (N.D. Cal. Aug. 3, 2009); Zahm v. Metro. Life

Ret. Plan, 2008 WL 11419005, at *1, *4-5 (S.D. Ga. Mar. 3,

2008).

Practical Law Standard Document W-043-7975 at ¶ 2(g), note (“If

there are multiple changes to an existing provision, the drafter

may prefer to restate the revised provision in full in the

amendment . . . . This allows the reader to review the new

revised provision more easily by seeing it set out in full in

one place[.]”); Amendment to Acquisition Agreement, Practical

Law Standard Document W-005-5139 at ¶ 2(b), note (similar).

* * *

There is no reason in this case to depart from any of the above.

If the 2001 and 2002 amendments to Article 17 do not entirely

supersede the 1985 version of Article 17, then presumably the

later amendments merely supplement the original. And this

appears to be the Plaintiffs’ argument. See Opposition Brief at

5.

But many provisions of the 2001 and 2002 amendments to Article

17 are very closely similar to provisions in the 1985 version of

Article 17.19

There is no reason to supplement a contract by folding into it

virtual carbon copies of provisions it already has. See Hardy

ex rel. Dowdell v. Abdul-Martin, 198 N.J. 95, 103 (2009) (“A

basic principle of contract interpretation is to read the

document as a whole in a . . . common sense manner.”)

And the illogic of this is recognized in New Jersey law, which

disfavors interpretations of contracts that would create

redundancy. See Krosnowski v. Krosnowski, 22 N.J. 376, 387

(1956) (“[A]ll parts of the writing and every word of it, will,

if possible, be given effect[.]”); see also Porreca v. City of

Millville, 419 N.J. Super. 212, 233 (App. Div. 2011) (“A

contract should not be interpreted to render one of its terms

meaningless.”) (cleaned up); Focazio v. Aboyoun, 2025 WL 582369,

at *6 (N.J. Super. Ct. App. Div. Feb. 24, 2025) (same);

Cumberland Cnty. Improvement Auth. V. GSP Recycling Co., Inc.,

358 N.J. Super. 484, 497 (App. Div. 2003) (same).

19 The first sentence of the amended Article 17(c), for example,

is nearly identical to the original Article 17(e). And the

amended versions of Articles 17(a), 17(b)(i), and 17(b)(ii)

overlap to a good extent with various provisions in the original

Deed. Compare Motion to Dismiss, Attachment 4, at 55-56 with

Motion to Dismiss, Attachment 3, at 71-75.

But that is what the Plaintiffs’ proposed interpretation would

do. It would treat both Time 1 and Time 2 contractual

provisions as having continued effect --- even though that

reading makes redundant many of the provisions added into the

mix at Time 2.

By contrast, the Defendant’s approach eliminates this

difficulty. Some Time 1 and Time 2 provisions may essentially

be mirror images of one another. But on the way of thinking

advocated by the Defendant, that makes no difference, because

the Time 1 provisions have no effect --- they were displaced “in

their entirety” by the changes at Time 2.

And one more difficulty with the Plaintiffs’ proposed

interpretation. If the 1985 Master Deed is in play, and so are

the 2001 and 2002 amendments, then some small contradictions are

created between them --- as to notice period, for example,

compare Motion to Dismiss, Attachment 3, at 73, art. 17(c)(v)

with Motion to Dismiss, Attachment 4, at 56, art. 17(b)(v), and

the required insurance type, compare Motion to Dismiss,

Attachment 3, at 73, art. 17(c)(iv), with Motion to Dismiss,

Attachment 4, at 56, art. 17(b)(iv).

But contracts should not be read in ways that open up internal

contradictions. See Forman v. Levenson, 2020 WL 359672, at *7

(N.J. Super. Ct. App. Div. Jan. 22, 2020); 89 Water St. Assocs.

v. Reilly, 2019 WL 4793073, at *7 (N.J. Super. Ct. App. Div.

Oct. 1, 2019); Universal N. Am. Ins. Co. v. Bridgepointe Condo.

Assoc., Inc., 456 N.J. Super. 480, 494 (App. Div. 2018). That

is what the Plaintiffs’ proposed reading does --- but not the

Defendant’s.

* * *

Where things stand:

Article 17 of the 1985 Master Deed (which contained a kind of

right of first refusal) was superseded “in its entirety” by the

2001 and 2002 amendments (which do not). Therefore, the Master

Deed, as amended, contains no operative right of first refusal.

The Plaintiffs’ allegation that there was such a right must be

put aside --- it rests on an understanding of the Master Deed,

but that understanding is inaccurate.

IV. The Plaintiff’s Claims

The conclusion set out just above requires the dismissal of

those of the Plaintiffs’ claims that are taken up in this

opinion. See footnote 6. To see this, tick through each claim

now.

A. Breach of Contract

Under New Jersey law, a breach of contract claim includes four

elements:

[F]irst, that the parties entered into a

contract containing certain terms; second,

that [the] plaintiffs did what the contract

required them to do; third, that [the]

defendants did not do what the contract

required them to do, defined as breach of

the contract; and fourth, that [the]

defendants’ breach, or failure to do what

the contract required, caused a loss to the

plaintiffs.

Goldfarb v. Solimine, 245 N.J. 326, 338 (2021) (cleaned up).

Look to the third: the Plaintiffs must show that the Defendant

ran afoul of what the contract “required them to do.” Id.

Here, the allegation is that the Defendant sold two units in

2022 but “failed and refused to provide [the] Plaintiffs with

the Right of First Refusal.” Complaint ¶¶ 29, 40.

But the right of first refusal fell out of the Master Deed about

20 years earlier, when it was amended in 2001. It no longer

included a right of first refusal by the time the Defendant was

selling the units. See Part III.B.

The Plaintiffs cannot make out a “plausible,” see Ashcroft v.

Iqbal, 556 U.S. 662, 670 (2009), breach-of-contract claim by

invoking a contractual provision that no longer had any effect.

Therefore, the claim must be dismissed.

B. Breach of the Implied Covenant

Next, look to the Plaintiffs’ claim for breach of the implied

covenant of good faith and fair dealing.

In New Jersey, “[e]very contract contains an implied covenant of

good faith and fair dealing.” Wade v. Kessler Inst., 172 N.J.

327, 340 (2002). And that covenant requires that “neither party

shall do anything which will have the effect of destroying or

injuring the right of the other party to receive the fruits of

the contract.” Id. (cleaned up). More generally, “[g]ood faith

conduct is conduct that does not violate community standards of

decency, fairness or reasonableness.” Brunswick Hills Racquet

Club, Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 224

(2005) (cleaned up).

The alleged breach of the implied covenant, as set forth in the

Complaint: the Defendant’s failure “to provide [the] Plaintiffs

the option to purchase certain real property in accordance with

a Right of First Refusal.” Complaint ¶ 44.

As to this claim, the Court’s conclusion that the amended Master

Deed no longer contained a right of first refusal is not the end

of the road. That is because “a party’s performance under a

contract may breach that implied covenant even though [its]

performance does not violate a pertinent express term.” Wilson

v. Amerada Hess Corp., 168 N.J. 236, 244 (2001).20

But still, the Plaintiff’s implied covenant claim does not pass

muster.

First, the drafting history of the Master Deed, see Part

III.A.1-2, shows that the Deed was actively amended to eliminate

any right of first refusal. It would hardly preserve anyone’s

ability to “receive the fruits,” Wade, 172 N.J. at 340, of the

amended Master Deed by reading into it a term that had been

explicitly removed. Quite the opposite. See Est. of Cotton v.

Senior Plan. Servs., 2020 WL 7022740, at *19 (D.N.J. Nov. 30,

2020) (applying New Jersey law: “[The] Plaintiffs cannot utilize

the implied covenant of faith and fair dealing to supplement the

contract with additional terms which contradict the parties’

clearly laid out contractual expectations.”); cf. ACBB Bits,

L.L.C. v. 550 Broad St., LLP, 2011 WL 5838737, at *14-15 (N.J.

Super. Ct. App. Div. Nov. 22, 2011) (no breach of the implied

covenant where one party’s interpretation and application of a

20 This is a distinct aspect of New Jersey law. See Wilson, 168

N.J. at 244 (“Other jurisdictions regard the implied covenant of

good faith and fair dealing as merely a guide in the

construction of explicit terms in an agreement.”).

contractual provision did not strip the counterparty “of the

benefit of the bargain”).

Second, there is no suggestion here of unfair surprise or

unreasonableness of the sort that might violate “community

standards.” Brunswick Hills, 182 N.J. at 224. The parties are

commercial entities, and presumably sophisticated ones. And

there is no allegation that the rug was pulled out from under

them --- that they bought a unit that had been subject to a

right of first refusal, only to have the right later yanked away

from them unfairly. See id. at 214, 226 (landlord breached the

implied covenant by evading a tenant’s requests to close a lease

option and purposefully failing to point out a deficiency in the

tenant’s effort to exercise that option until after the relevant

deadline passed; “a plaintiff may get relief if it relies to its

detriment on a defendant’s intentional misleading assertions”);

Bak-A-Lum Corp. of Am. v. Alcoa Bldg. Prods., Inc., 69 N.J. 123,

129-30 (1976) (the defendant breached the implied covenant by

withholding its plans to terminate the parties’ distribution

agreement while simultaneously encouraging the plaintiff to

expand its facilities).

Third, the Plaintiffs’ implied-covenant claim does not rest on

any case-specific allegations as to why the implied covenant

should be used here to essentially read a right of first refusal

into the Master Deed. In the absence of any case-specific

reason to proceed that way, the Plaintiffs’ argument is

necessarily generic --- and therefore amounts to a contention

that a right of first refusal should be judicially read into all

New Jersey real property covenants.

This would be a dramatic step. It might arguably be a positive

--- rights of first refusal might generate some social gains by

incentivizing property holders to make certain investments. See

Marcel Kahan, et al., First-Purchase Rights: Rights of First

Refusal and Rights of First Offer, 14 Am. L. & Econ. Rev. 331,

346-54 (2012). Or it might arguably be a deck-scrambling

negative --- rights of first refusal are valuable, see id. at

332-38, and reading them into deeds would be to transfer value

to some people in the real estate ecosystem, with others

implicitly paying for the windfall. Cf. David I. Walker,

Rethinking Rights of First Refusal, 5 Stanford J.L., Bus. & Fin.

1, 16 (1999).

But across-the-board arguments are for the New Jersey

legislature to take up, or the New Jersey Supreme Court --- not

for this Court, which is charged with applying New Jersey law,

not remaking it.21

The right to freely sell off one’s property is “a right that is

often in the bundle of property rights.” United States v.

Craft, 535 U.S. 274, 284 (2002); see also Loretto v.

Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 (1982)

(“Property rights in a physical thing have been described as the

rights to possess, use and dispose of it.”) (cleaned up). If

that right is to be whittled back under New Jersey law, by

limiting who must get first crack at buying --- then that

limitation is for New Jersey authorities to impose should they

wish to, not this Court.

Fourth, there is no suggestion in the Plaintiffs’ brief that

their proposed approach finds meaningful support in New Jersey

law --- and that is a final reason not to go the Plaintiffs’

way. Federal courts sitting in diversity, as here, “may not . .

. expand state law in ways not foreshadowed by state precedent.”

Spence v. ESAB Grp., Inc., 623 F.3d 212, 217 (3d Cir. 2010)

(cleaned up); see also Travelers Indem. Co. v. Dammann & Co.,

Inc., 594 F.3d 238, 253 (3d Cir. 2010); City of Phila. v. Lead

Indus. Ass’n, Inc., 994 F.2d 112, 127 (3d Cir. 1993).

In a nutshell: the Defendant did not “behave inequitably,”

Brunswick Hills, 182 N.J. at 231, by failing to abide by a right

of first refusal that was no longer expressly part of the

controlling contract. The claim for breach of the implied

covenant of good faith and fair dealing must be dismissed.

C. Specific Performance & Declaratory Judgment

Finally, the Plaintiffs seek specific performance, to compel the

Defendant to sell the property in question to the Plaintiffs

“pursuant to the terms of the Right of First Refusal,” Complaint

21 See Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 426

(1996) (“Federal diversity jurisdiction provides an alternative

forum for the adjudication of state-created rights, but it does

not carry with it generation of rules of substantive law.”); Day

& Zimmermann, Inc. v. Challoner, 423 U.S. 3, 4 (1975) (“A

federal court in a diversity case is not free to engraft onto

those state rules exceptions or modifications which may commend

themselves to the federal court, but which have not commended

themselves to the State in which the federal court sits.”).

{@ 35, and a deciaratory judgment that the Plaintiffs may

exercise the alleged right. See id. 9 37.

But absent an enforceable right of first refusal in the amended

Master Deed, see Part IV.A-B, there are no grounds for the Court

to grant such relief. Therefore, these claims also fail.

Ve Conclusion

The Defendant’s motion to dismiss is granted as to Counts I, IT,

TII, and IV.

TIT iS on this 17th day of March, □□ ene

Michael E. Farbiarz, ¥J.S.D.Jd.

on