Newark Adams Associates, LLC v. Sumo Enterprises, Inc.

NOT FOR PUBLICATION WITHOUT THE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-3685-22

NEWARK ADAMS

ASSOCIATES, LLC,

Plaintiff-Appellant,

v.

SUMO ENTERPRISES, INC.,

UNDERGROUND UTILITIES

CORP., a/k/a UNDERGROUND

UTILITIES, INC., and

CITY OF NEWARK,

Defendants-Respondents.

____________________________

Submitted November 19, 2024 – Decided April 9, 2025

Before Judges Gilson, Bishop-Thompson, and

Augostini.

On appeal from the Superior Court of New Jersey,

Chancery Division, Essex County, Docket No.

C-000059-22.

Cole Schotz, PC, attorneys for appellant (Mitchell W.

Abrahams, Lauren M. Manduke, and Gianna L. Zapata,

of counsel and on the briefs).

Michael A. Armstrong & Associates, LLC, attorneys

for respondent City of Newark (Morrison Kent

Fairbairn, Cristal Holmes-Bowie, and Alexis A.

Cotsalas, on the brief).

Hill Wallack, LLP, attorneys for respondents Sumo

Enterprises, Inc. and Underground Utilities Corp. (Eric

I. Abraham, of counsel and on the brief).

PER CURIAM

This appeal arises from a dispute regarding the building of a multi-level

parking garage in the City of Newark (City). Plaintiff Newark Adams

Associates, L.L.C., appeals from a June 21, 2023, order granting summary

judgment in favor of defendants Sumo Enterprises, Inc. (Sumo), Underground

Utilities Corporation a/k/a Underground Utilities, Inc. (UUC), and the City

(collectively, defendants) and dismissing its complaint. We affirm.

I.

We glean the facts from the summary judgment record, viewing the facts

in the light most favorable to plaintiff as the non-moving party. Statewide Ins.

Fund v. Star Ins. Co., 253 N.J. 119, 125 (2023). In 1986, plaintiff purchased

commercial property from the City known as the Newark Adams Center, a

fourteen-store retail shopping center, located at 64-88 Adams Street. The rear

of plaintiff's property directly abuts 85-101 Jackson Street (Property), which is

co-owned by UUC and Sumo. Plaintiff and Sumo are parties to a lease that

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permits plaintiff to open three doors of its shopping center out onto the Property,

avoiding the need to construct expensive fire-related egress from plaintiff's

building. The lease also allows Sumo to terminate the lease on ninety days'

written notice.

The Property is in the boundaries of the 2001 Redevelopment Plan, which

permits commercial and retail use. The plan also provided for a "multi-tier

public parking structure and office space as permitted under the applicable

existing Federal and State regulations . . . and as allowed in the B2 Zoning

Districts." No parking decking was mandated.

In August 2004, the City passed an ordinance approving the "Amended

Jackson-Downing Redevelopment Plan," which provided that "[z]oning for this

area shall permit a multi-tier public parking structure and office space facility

as permitted under applicable existing Federal and State regulations . . . Zoning

for this area shall also permit commercial/reuse consistent with that allowed in

BS Zoning Districts."

Thereafter, the City and UUC entered an "Agreement for Sale of Land and

Redevelopment of Jackson-Downing (2004 Agreement)," which contain three

sections relevant to this appeal. Section 101(1) – IMPROVEMENTS, provided

that UUC can "construct a multi-level parking garage with the capacity of

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approximately 375 cars, all in conformance with [City's] Site Plan Ordinance,

except as otherwise approved by City and/or the Central Planning Board or

Board of Adjustment . . . ." Section 1101(E) – EVENTS OF DEFAULT BY

REDEVELOPER; NOTICE; REMEDIES, states, in relevant part, the City had

the "right to re-enter and take possession and to terminate the estate" in the event

of default by UUC. Lastly, Section 1310 – NO THIRD[-]PARTY RIGHTS,

stated that "nothing contained in this [2004] Agreement [was] intended to nor

shall [] be construed to create any rights" to persons not a party to this

Agreement.

In September 2005, the Municipal Council passed a resolution authorizing

the 2004 Agreement between the City and the UUC. Thereafter, in November

2005, the deed (2005 Deed), conveying a portion of the property from the City

to UUC, expressly stated the conveyance was "[s]ubject to the terms and

conditions set forth in the [2004 Agreement]" and "subject further to the [2004]

Amended Jackson[-]Downing Redevelopment Plan as adopted by the Municipal

Council pursuant to Ordinance 6S [and] FJ, dated August 4, 2004." The 2005

Deed made no reference to a right of reentry and possession in the event UUC

defaulted.

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The City's Central Planning Board (CPB) adopted a new master plan in

September 2012, to address, among other issues, zoning, development, and

redevelopment. The plan sought to "[r]evise parking standards to encourage the

redevelopment of surface parking lots" by "[d]iscouraging new surface parking

lots as a matter of right in certain areas of downtown," "[r]evising downtown

parking standards to promote shared parking," and "[r]educing downtown

parking ratio requirements." Two years later, the City released a Newark

Redevelopment Boundary Map.

Thereafter, in February 2015, the City determined that many previously

existing redevelopment plans did not align with the 2012 Master Plan's

objectives. The Municipal Council subsequently passed Ordinance 6PFSF-C,

which repealed prior redevelopment plans, including the 2001 Redevelopment

Plan upon which the 2004 Agreement was based.

As of June 2021, UUC had not constructed the multi-level parking garage

on the Property. Rather, UUC and Sumo applied to the CPB to construct a multi-

level, mixed-use commercial and residential building.

On October 15, 2021, the City notified UUC that it had defaulted on the

2004 Agreement by not moving forward with the parking garage and that the

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City would "enforce" its rights under the [2004] [A]greement "to re-enter and

take possession" of the Property.

In January 2022, plaintiff objected to the mixed-use project, arguing that

UUC and Sumo were required to build the parking garage under the 2004

Agreement. Plaintiff also requested the City to re-enter or re-take possession of

the Property, contending UUC and Sumo had defaulted on the 2004 Agreement.

That same month, the CPB approved the preliminary and final site plans

for UUC and Sumo's application for its mixed-use project subject to the City's

2020 Redevelopment Plan and memorialized its approval in a resolution.

Regarding the parking for the mixed-use site, the resolution stated, "[t]here is a

20-foot-wide driveway" on the property that would "provide[] access to seven

(7) surface parking spaces and one (1) . . . load space." The resolution also

provided the Property "is in the [2020] Jackson and Ferry Redevelopment Area

where mixed-use development is permitted."

In February 2022, UUC and Sumo replied to the City's letter regarding the

defaulted 2004 Agreement because the parking garage had yet to be constructed.

According to defendants, the project had "transformed over time with the City's

input and approval." They further asserted a feasibility study was conducted,

which determined the construction of a parking garage "became impractical"

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because "[P]roperty [would] operate[] at a negative cashflow as a parking lot."

The City's Parking Authority relinquished its rights to the Property and

supported UUC and Sumo's development of the Property into a mixed-use

facility. No further action was taken by the City.

In March 2022, plaintiff filed its first prerogative writs complaint against

UUC, Sumo, and the CPB, docket number ESX-L-1530-22, asserting the CPB's

approval was "unlawful" based on numerous defects in the approval of UUC and

Sumo's application to construct a nine-story commercial and residential building

on the Property. The trial date was scheduled for May 22, 2023.

Plaintiff filed this matter in April 2022, against defendants regarding the

construction of the parking garage. Plaintiff asserted claims for specific

performance of the 2004 Agreement, declaratory judgment compelling UUC to

construct the five-story parking garage, or in the alternative compelling the City

to re-take possession of the Property, breach of contract, and tortious

interference with contract and with prospective economic advantage.

Plaintiff then initiated a third lawsuit in March 2023. In that third suit,

plaintiff filed a second prerogative writs complaint against UUC, Sumo, the CPB

and the Municipal Council, under docket number ESX-L-1854-22, sought to

have the 2020 Jackson and Ferry Redevelopment Plan deemed void and prohibit

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the construction of the nine-story commercial and residential building on the

Property.

Before the conclusion of discovery in this matter, defendants moved for

summary judgment, arguing plaintiff was precluded from asserting any rights as

a third-party under Section 1310 of the 2004 Agreement. Plaintiff opposed

defendants' motion and argued there were questions of material fact that required

the completion of discovery. It also cross-moved to stay this matter pending the

adjudication of its second prerogative writs action.

Following oral argument on June 21, 2023, the trial court granted

defendants' motions for summary judgment. In a written decision, the court

reasoned plaintiff did not have taxpayer standing to file the matter against

defendants because it was not a party to nor the intended beneficiary of the 2004

Agreement. The court further found the 2004 Agreement did not expressly

mandate the "exclusive use" of the Property as a parking garage. In that regard,

the court also "did not find the language in the 2004 Agreement to be a deed

restriction."

The court also denied plaintiff's cross-motion to stay the trial in the first

prerogative writs matter, finding its application did not meet the standard under

Crowe v. De Gioia, 90 N.J. 126, 133 (1982) and Garden State Equal. v. Dow,

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8

216 N.J. 314 (2013). The court also determined the two prerogative writs actions

are related to the approvals for UUC and Sumo's recent site plan, and therefore,

plaintiff had the potential for an adequate remedy at law. A memorializing order

was entered. This appeal followed.

II.

On appeal, plaintiff raises five arguments for our consideration. It first

argues the trial court erred in finding that plaintiff lacked standing as a taxpayer

to bring the action challenging the municipal actions. Second, the trial court

erred in finding there was no deed restriction because the 2004 Agreement and

deed remain valid and enforceable. Third, the court erred in finding plaintiff

was not an intended beneficiary of the 2004 Agreement. Fourth, plaintiff

contended that the court abused its discretion in granting summary judgment

when "significant" discovery remained outstanding. Lastly, the trial court erred

by finding plaintiff had a sufficient remedy in the two pending prerogative writs

matters.

We review a grant of summary judgment de novo, applying the same

standard as the trial court. Samolyk v. Berthe, 251 N.J. 73, 78 (2022). That

standard requires us to "determine whether 'the pleadings, depositions, answers

to interrogatories and admissions on file, together with the affidavits, if any,

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show that there is no genuine issue as to any material fact challenged and that

the moving party is entitled to a judgment or order as a matter of law.'" Branch

v. Cream-O-Land Dairy, 244 N.J. 567, 582 (2021) (quoting R. 4:46-2(c)).

"Summary judgment should be granted . . . 'against a party who fails to make a

showing sufficient to establish the existence of an element essential to that

party's case, and on which that party will bear the burden of proof at trial.'"

Friedman v. Martinez, 242 N.J. 449, 472 (2020) (quoting Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986)).

"Whether a party has standing to pursue a claim is a question of law

subject to de novo review." Cherokee LCP Land, LLC v. City of Linden Plan.

Bd., 234 N.J. 403, 414 (2018). We do not defer to the trial court's legal analysis

or statutory interpretation. RSI Bank v. Providence Mut. Fire Ins. Co., 234 N.J.

459, 472 (2018); Perez v. Zagami, LLC, 218 N.J. 202, 209 (2014).

A. Standing as a Taxpayer and Intended Third-Party Beneficiary.

We first address plaintiff's arguments in Points I and III that the trial court

erred in finding it did not have standing as a taxpayer or a third-party beneficiary

to the 2004 Agreement. "Unlike the federal system, our Supreme Court defines

standing broadly and does not restrict New Jersey courts to the rigid 'case or

controversy' requirement under Article III, § 2 of the United States

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Constitution." State v. Lavrik, 472 N.J. Super. 192, 204 (App. Div. 2022).

"Standing is a threshold justiciability determination of whether the plaintiff is

entitled to initiate and maintain an action on the matter before the court."

Spinnaker Condo. Corp. v. Zoning Bd. of Sea Isle City, 357 N.J. Super. 105,

110 (App. Div. 2003). To have standing, a plaintiff must have "a sufficient stake

and real adverseness with respect to the subject matter of the litigation [and a]

substantial likelihood of some harm . . . in the event of an unfavorable decision

. . . ." Jen Elec., Inc. v. Cnty. of Essex, 197 N.J. 627, 645 (2009) (first alteration

in original) (quoting In re Adoption of Baby T, 160 N.J 332, 340 (1999)). Thus,

"standing 'is not automatic, and a litigant usually has no standing to assert the

rights of a third party.'" Bondi v. Citigroup, Inc., 423 N.J. Super. 377, 436 (App.

Div. 2011) (quoting In re Six Month Extension of N.J.A.C. 5:91-1 et seq., 372

N.J. Super. 61, 85 (App. Div. 2004)).

Plaintiff argues that the trial court's ruling contradicted well established

precedent concerning its standing as a taxpayer and third-party beneficiary.

Plaintiff relies on Koch v. Borough of Seaside Heights, 40 N.J. Super. 86 (App.

Div.), aff'd, 22 N.J. 218 (1956) (taxpayer entitled to enjoin the maintenance of

commercial buildings on land formerly used for public parking because the

commercial buildings were built under illegal lease agreements between the

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municipality and private parties) and Dover Twp. Homeowners & Tenants Ass'n

v. Dover Twp., 114 N.J. Super. 270, 275-76 (App. Div. 1971) (holding that

resident taxpayers had standing "[s]ince the matter raised by the complaint

alleges illegality on the part of the planning board affecting the integrity of the

zoning ordinance of the township").

Plaintiff does not cite to any evidence in the record showing the City's

actions were ultra vires. Instead, plaintiff mistakenly relies on Koch and Dover,

which are factually distinguishable. Here, unlike Koch, UUC legally purchased

the Property from the City for commercial use. The record does not show any

illegality on the part of the CPB.

Unlike Dover, plaintiff does not show how the Municipal Council's

adoption of the 2004 Agreement and the subsequent adoption of the 2015

ordinance and 2020 Redevelopment Plan altered the integrity of the City's

zoning ordinance. The appropriate avenue for plaintiff to challenge those

municipal actions was in the two separate prerogative writ matters. We,

therefore, hold plaintiff did not demonstrate any "great interest" to establish

standing as a taxpayer to enforce the 2004 Agreement.

Plaintiff next argues it is a third-party beneficiary of the 2004 Agreement

because "the primary objective of the Agreement [was] to benefit the residents

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of the City." It relies on Soussa v. Denville Twp. Plan. Bd., 238 N.J. Super. 66,

69 (App. Div. 1990), where plaintiffs executed a deed that contained a deed

restriction based on a resolution of the local planning board that was inserted

for the benefit of the public. We are unpersuaded by plaintiff's argument.

N.J.S.A. 2A:15-2 provides that "[a] person for whose benefit a contract is

made, either simple or sealed, may sue thereon in any court . . . ." The standard

applied by our courts in determining third-party beneficiary status is "whether

the contracting parties intended that a third[-]party beneficiary should receive a

benefit which might be enforced in courts . . . ." Rieder Cmtys. Inc. v. Twp. of

N. Brunswick, 227 N.J. Super 214, 222 (App. Div. 1988) (second alteration in

original) (quoting Brooklawn v. Brooklawn Hous. Corp., 124 N.J.L. 73, 77 (E.

& A. 1940)). "If that intent does not exist, then the third person is only an

incidental beneficiary, having no contractual standing." Broadway Maint. Corp.

v. Rutgers, The State Univ., 90 N.J. 253, 259 (1982).

Based on the record, we conclude Soussa is inapposite to this matter.

Here, there was a private agreement between UUC and the City. Unlike the

plaintiffs in Sousa, these plaintiffs were not parties to the 2004 Agreement.

Moreover, Section 1301 clearly and unambiguously provided that "[n]othing

contained within this [a]greement is intended to nor shall it be construed to

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create any rights of any kind whatsoever in persons not party to this

[a]greement." The 2005 Deed neither referenced nor created any third-party

interests in the City's residents. The 2004 Agreement did not restrict the

property to be used exclusively as a parking garage. Moreover, the 2004

Agreement was modified by the 2015 ordinance, which adopted new zoning and

land use restrictions. We hold plaintiff has not established that it was an

intended third-party beneficiary of the 2004 Agreement between the City and

UUC and, therefore, it had no right to enforce the agreement.

B. Deed Restriction.

Plaintiff further argues in the 2004 Agreement, which was incorporated

into the 2005 Deed, the City sold the Property to UUC "for the construction of

the parking garage for the 'vital and best interests of the City of Newark' and to

promote the 'health, safety, morals and welfare of its residents, in accordance

with public purposes[.]'" In support of that argument, plaintiff relies on Article

I Project: Improvements, Section 101 – Improvements, which stated: "the

Redeveloper shall construct a multi-level parking garage with a capacity of

approximately 375 cars, all in conformance with the [City's] Site Plan

Ordinance, except as otherwise approved by [the] City and/or the Central

planning Board or Board of Adjustment."

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"Restrictions on the use to which land may be put are not favored in law

because they impair alienability." Bruno v. Hanna, 63 N.J. Super. 282, 285

(App. Div. 1960). As a result, "courts will not aid one person to restrict another

in the use of his [or her] land unless the right to restrict is made manifest and

clear in the restrictive covenant." Berger v. State, 71 N.J. 206, 215 (1976)

(quoting Bruno, 63 N.J. Super. at 285) (internal quotation marks omitted).

We review de novo the interpretation and construction of a deed as a

matter of law. Cooper River Plaza E., LLC v. Briad Grp., 359 N.J. Super. 518,

528 (App. Div. 2003). Therefore, we analyze a deed restriction "in accordance

with the principles of contract interpretation, which include a determination of

the intention of the parties as revealed by the language used by them." Id. at

527; see also Homann v. Torchinsky, 296 N.J. Super. 326, 334 (App. Div. 1997)

(explaining "[a] restrictive covenant [in a deed] is a contract" (first alteration in

original) (quoting Weinstein v. Swartz, 3 N.J. 80, 86 (1949))).

Plaintiff's interpretation ignores that the 2001 and 2004 Agreements were

repealed by the City's 2015 ordinance and subsequent 2020 Redevelopment Plan

because they were inconsistent with the City's redevelopment goals. Simply

stated, plaintiff's contention that the prior Agreements remain incorporated into

the 2005 Deed is not supported by the record.

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We must interpret the 2005 Deed reasonably and in the context of 2015

ordinance and subsequent 2020 Redevelopment Plan, and we therefore give

effect to its plain language. See Schor v. FMS Fin. Corp., 357 N.J. Super. 185,

191 (App. Div. 2002). Having reviewed the record, we reject plaintiff's

argument that the 2005 Deed restricted UUC's use of the Property to the

construction of a parking deck.

C. Incomplete Discovery.

Lastly, plaintiff argues summary judgment was improvidently granted

because discovery had not been completed. Plaintiff contends "the City did not

complete its production, provide a Rule-compliant privilege log, or produce an

agent for testimony to . . . explain the status of the default the City declared

against UUC in October 2021." Plaintiff further argues discovery was needed

to determine "what resolution, if any, was reached between UUC and the City

regarding its default, and why there [were] competing versions of the 2020

Redevelopment Plan."

Summary judgment is generally inappropriate prior to the completion of

discovery. Velantzas v. Colgate-Palmolive Co., 109 N.J. 189, 193 (1988).

However, "summary judgment is not premature merely because discovery has

not been completed, unless" the non-moving party can show "'with some degree

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of particularity the likelihood that further discovery will supply the missing

elements of the cause of action.'" Friedman, 242 N.J. at 472-73 (quoting Badiali

v. N.J. Mfrs. Ins. Grp., 220 N.J. 544, 555 (2015)). There is no need to complete

further discovery "if it will patently not change the outcome." Minoia v.

Kushner, 365 N.J. Super. 304, 307 (App. Div. 2004).

Here, plaintiff has not identified any specific discovery; instead, it makes

a generalized assertion that depositions and documents production was needed.

Plaintiff, however, has not cited to a specific document or deposition that would

have supplied the missing elements of its claims and altered the motion's

outcome. Thus, plaintiff's argument that the motion was not ripe for

determination based upon incomplete discovery lacks merit. Indeed, as our

analysis has shown the issues in this matter turn on the interpretation of the

various agreements and deed.

In sum, based on our de novo review, we conclude there was no material

genuine factual dispute, and the court properly granted defendants' motion for

summary judgment. To the extent we have not addressed any of plaintiff's

remaining arguments, it is because they lack sufficient merit to warrant

discussion in a written opinion. R. 2:11-3 (e)(1)(E).

Affirmed.

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